In a major breakthrough, artificial intelligence (AI) chatbot ChatGPT has been able to correctly predict the movement of stock prices by instantly analysing news headlines. This development has been reported by Bloomberg and is set to revolutionise the financial industry.
ChatGPT was employed to carry out market-relevant tasks, and two studies about the same were released. One of the study used the chatbot to decode Fed Speak and predict stock moves from headlines, while the other found that answers given by ChatGPT showed a statistical link to the stock's subsequent moves. Alejandro Lopez-Lira, a finance professor at the University of Florida, says that large language models may be useful when forecasting stock movements.
The technology behind this breakthrough is natural language processing (NLP). NLP enables computers to understand human language and interpret it in order to respond accurately. With this new capability, ChatGPT can now analyse news headlines and make predictions about how stocks will move in response. This will benefit investors worldwide as they can now make more informed decisions based on accurate predictions from an AI chatbot.
Experts in both finance and technology have expressed their opinions on this development. According to one expert, “The way that ChatGPT is understanding data implied for people nearly ensures if the market doesn't answer impeccably, that there will be some sort of predictive power." Another expert believes that "ChatGPT can provide investors with an edge over traditional methods of analysis."
ChatGPT's latest breakthrough has opened up many possibilities for investors around the world who are looking for more accurate predictions when it comes to stock market movements. With its advanced capabilities powered by natural language processing, ChatGPT is sure to revolutionise the financial industry for years to come.