The Influence of Artificial Intelligence and Social Media on Investment Behaviour Among Young Adults: Examining Trust, Herd Mentality, Financial Literacy, and the Credibility of AI-Generated Financial Advice

Jai Prasad

The Influence of Artificial Intelligence and Social Media on Investment Behaviour Among Young Adults: Examining Trust, Herd Mentality, Financial Literacy, and the Credibility of AI-Generated Financial Advice

Author(s)	Mr. Jai Prasad
Country	India
Abstract	The rapid growth of Artificial Intelligence (AI) and social media has transformed how young adults access financial information and make investment decisions, raising questions about the credibility of AI-generated advice, the influence of social validation, and the role of financial literacy in shaping investor behaviour. This study examines the relationship between exposure to AI-generated financial advice and investment decision-making among young adults aged 18–35, and analyses the combined influence of trust in AI-generated advice, financial literacy, social media influence, and herd mentality on their investment choices. A quantitative, cross-sectional research design was adopted, using a structured Likert-scale questionnaire distributed via convenience sampling, yielding 50 valid responses. Data were analysed using Cronbach's alpha for construct reliability, Pearson correlation to examine relationships between constructs, and multiple linear regression to test the study's two hypotheses. Results showed that exposure to AI-generated financial advice significantly predicted investment decision-making on its own (R² = .412, p < .001). In the combined regression model, trust in AI-generated advice and social media influence emerged as significant predictors, together explaining 55.7% of the variance in investment decision-making (R² = .557, p < .001), while financial literacy and herd mentality were not statistically significant. Notably, respondents reported low outright trust in AI-generated advice yet frequently verified it before acting — a cautious pattern of engagement that did not diminish AI's behavioural influence. Similarly, self-assessed financial literacy did not translate into reduced susceptibility to digital influence, despite respondents' belief that it would. These findings suggest that AI and social media function as closely linked, dominant forces shaping young adults' investment behaviour, and point to the need for financial education and AI design approaches that target applied decision-making rather than self-reported knowledge or trust alone.
Published In	Volume 8, Issue 5, September-October 2026
Published On	2026-09-06

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The Influence of Artificial Intelligence and Social Media on Investment Behaviour Among Young Adults: Examining Trust, Herd Mentality, Financial Literacy, and the Credibility of AI-Generated Financial Advice

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