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Potential of ChatGPT in predicting stock market trends based on Twitter Sentiment Analysis

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  • Ummara Mumtaz
  • Summaya Mumtaz

Abstract

The rise of ChatGPT has brought a notable shift to the AI sector, with its exceptional conversational skills and deep grasp of language. Recognizing its value across different areas, our study investigates ChatGPT's capacity to predict stock market movements using only social media tweets and sentiment analysis. We aim to see if ChatGPT can tap into the vast sentiment data on platforms like Twitter to offer insightful predictions about stock trends. We focus on determining if a tweet has a positive, negative, or neutral effect on two big tech giants Microsoft and Google's stock value. Our findings highlight a positive link between ChatGPT's evaluations and the following days stock results for both tech companies. This research enriches our view on ChatGPT's adaptability and emphasizes the growing importance of AI in shaping financial market forecasts.

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  • Ummara Mumtaz & Summaya Mumtaz, 2023. "Potential of ChatGPT in predicting stock market trends based on Twitter Sentiment Analysis," Papers 2311.06273, arXiv.org.
    • Handle: RePEc:arx:papers:2311.06273
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    References listed on IDEAS

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    1. Alejandro Lopez-Lira & Yuehua Tang, 2023. "Can ChatGPT Forecast Stock Price Movements? Return Predictability and Large Language Models," Papers 2304.07619, arXiv.org, revised Sep 2023.
    2. Ronny Luss & Alexandre D'Aspremont, 2015. "Predicting abnormal returns from news using text classification," Quantitative Finance, Taylor & Francis Journals, vol. 15(6), pages 999-1012, June.
    3. Qianqian Xie & Weiguang Han & Yanzhao Lai & Min Peng & Jimin Huang, 2023. "The Wall Street Neophyte: A Zero-Shot Analysis of ChatGPT Over MultiModal Stock Movement Prediction Challenges," Papers 2304.05351, arXiv.org, revised Apr 2023.
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