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Financial literacy of ChatGPT: Evidence through financial news

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  • Chiu, Ya-Ling
  • Gao, Xuechen
  • Liu, Hung-Chun
  • Zhai, Qiong

Abstract

Our study explores the potential of AI to interpret financial news articles and support the development of effective investment strategies. The well-known AI model, ChatGPT, was employed to analyze a set of financial news articles published in 2022 related to the Taiwan stock market and assign a buying score to each stock mentioned. The daily average buying scores provided by ChatGPT largely reflect the overall stock market movement. Stocks receiving higher buying scores tend to outperform those with lower scores. Portfolios composed of stocks with low buying scores significantly underperform the market, suggesting that negative news have a notable adverse effect on subsequent stock performance.

Suggested Citation

  • Chiu, Ya-Ling & Gao, Xuechen & Liu, Hung-Chun & Zhai, Qiong, 2025. "Financial literacy of ChatGPT: Evidence through financial news," Finance Research Letters, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325003514
    DOI: 10.1016/j.frl.2025.107088
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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