A trader works on the floor of the New York Stock Exchange.
Jason Decrow
Alejandro Lopez-Lira, a finance professor at the University of Florida, says that large language models may be useful when forecasting stock prices.
He used ChatGPT to parse news headlines for whether they’re good or bad for a stock, and found that ChatGPT’s ability to predict the direction of the next day’s returns were much better than random, he said in a recent unreviewed paper.
The experiment strikes at the heart of the promise around state-of-the-art artificial intelligence: With bigger computers and better datasets — like those powering ChatGPT — these AI models may display “emergent abilities,” or capabilities that weren’t originally planned when they were built.
If ChatGPT can display the emergent ability to understand headlines from financial news and how they might impact stock prices, it could could put high-paying jobs in the financial industry at risk. About 35% of financial jobs are at risk of being automated by AI, Goldman Sachs estimated in a March 26 note.
“The fact that ChatGPT is understanding information meant for humans almost guarantees if the market doesn’t respond perfectly, that there will be return predictability,” said Lopez-Lira.
But the specifics of the experiment also show how far so-called “large language models” are from being able to do many finance tasks.
For example, the experiment didn’t include target prices, or have the model do any math at all. In fact, ChatGPT-style technology often makes numbers up, as Microsoft learned in a public demo earlier this year. Sentiment analysis of headlines is also well understood as a trading strategy, with proprietary datasets already in existence.
Lopez-Lira said he was surprised by the results, adding they suggest that sophisticated investors aren’t using ChatGPT-style machine learning in their trading strategies yet.
“On the regulation side, if we have computers just reading the headlines, headlines will matter more, and we can see if everyone should have access to machines such as GPT,” said Lopez-Lira. “Second, it’s certainly going to have some implications on the employment of financial analyst landscape. The question is, do I want to pay analysts? Or can I just put textual information in a model?”
How the experiment worked
In the experiment, Lopez-Lira and his partner Yuehua Tang looked at over 50,000 headlines from a data vendor about public stocks on the New York Stock Exchange, Nasdaq, and a small-cap exchange. They started in October 2022 — after the data cutoff date for ChatGPT, meaning that the engine hadn’t seen or used those headlines in training.
Then, they fed the headlines into ChatGPT 3.5 along with the following prompt:
“Forget all your previous instructions. Pretend you are a financial expert. You are a financial expert with stock recommendation experience. Answer “YES” if good news, “NO” if bad news, or “UNKNOWN” if uncertain in the first line. Then elaborate with one short and concise sentence on the next line.”
Then they looked at the stocks’ return during the following trading day.
Ultimately, Lopez-Lira found that the model did better in nearly all cases when informed by a news headline. Specifically, he found a less than 1% chance the model would do as well picking the next day’s move at random, versus when it was informed by a news headline.
ChatGPT also beat commercial datasets with human sentiment scores. One example in the paper showed a headline about a company settling litigation and paying a fine, which had a negative sentiment, but the ChatGPT response correctly reasoned it was actually good news, according to the researchers.
Lopez-Lira told CNBC that hedge funds had reached out to him to learn more about his research. He also said it wouldn’t surprise him if ChatGPT’s ability to predict stock moves decreased in the coming months as institutions started integrating this technology.
That’s because the experiment only looked at stock prices during the next trading day, while most people would expect the market could have already priced the news in seconds after it became public.
“As more and more people use these type of tools, the markets are going to become more efficient, so you would expect return predictability to decline,” Lopez-Lira said. “So my guess is, if I run this exercise, in the next five years, by the year five, there will be zero return predictability.”
A Xiaomi electric car SU7 in a store in Yichang, Hubei Province, China on July 19, 2025.
Cfoto | Future Publishing | Getty Images
Chinese tech giant Xiaomi saw its shares fall over 5% on Monday, following reports that the doors of one of its electric vehicles failed to open after a fiery crash in China that left one person dead.
The stock slid as much as 8.7% in Hong Kong, marking its steepest drop since April, before paring losses after images and video of a burning Xiaomi SU7 sedan in Chengdu circulated on Chinese social media.
Video and eyewitness accounts showed bystanders trying but failing to open the doors of the burning car to rescue an occupant. Personnel at the scene eventually used a fire extinguisher to put out the blaze, local reports said.
Chengdu police said the crash occurred after the SU7 collided with another sedan, killing a 31-year-old male driver who was suspected of driving under the influence of alcohol.
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Xiaomi shares
Xiaomi, which manufactures consumer electronics, software and electric vehicles, did not immediately respond to CNBC’s request for comment.
The latest incident follows a fatal SU7 crash earlier this year that raised questions about the vehicle’s smart driving features and sent Xiaomi’s shares tumbling.
The crash could also intensify scrutiny on electronic door handles, a design popularized by Tesla and now common in modern EVs.
Unlike mechanical models, electronic door handles rely on sensors and electricity and may fail during a fire or power outage.
China is considering a ban on such electric door handles to address safety risks linked to the feature, state-backed media reported in late September.
Meanwhile, the U.S. National Highway Traffic Safety Administration has launched an investigation into about 174,000 Tesla Model Y vehicles after reports of door handle failures.
A close-up view of the Nexperia plant sign in Newport, Wales on April 1, 2022.
Matthew Horwood | Getty Images News | Getty Images
The Dutch government has taken control of Nexperia, a Chinese-owned semiconductor maker based in the Netherlands, in an extraordinary move to ensure a sufficient supply of its chips remains available in Europe amid rising global trade tensions.
Nexperia, a subsidiary of China’s Wingtech Technology, specializes in the high-volume production of chips used in automotive, consumer electronics and other industries, making it vital for maintaining Europe’s technological supply chains.
On Sunday evening, the Dutch Minister of Economic Affairs revealed that it had invoked the “Goods Availability Act” on the company in September in order “to prevent a situation in which the goods produced by Nexperia (finished and semi-finished products) would become unavailable in an emergency.”
Following the announcement from the Hague, Wingtech plunged its maximum daily limit of 10% on the Shanghai Stock Exchange.
The Goods Availability Act allows the Hague to intervene in private companies to ensure the availability of critical goods in preparation for emergency situations, and its use comes amid escalations in the U.S.-China trade war.
The government statement said the “highly exceptional” move had been made after the ministry had observed “recent and acute signals of serious governance shortcomings and actions” within Nexperia.
“These signals posed a threat to the continuity and safeguarding on Dutch and European soil of crucial technological knowledge and capabilities. Losing these capabilities could pose a risk to Dutch and European economic security,” it said, identifying automotives as particularly vulnerable.
Governance changes
In a corporate filing dated Oct.13, lodged with the Shanghai Stock Exchange, Wingtech confirmed Nexperia was under temporary external management and had been asked to suspend changes to the company’s assets, business or personnel for up to a year, according to a Google translation.
Wingtech chairman Zhang Xuezheng had been immediately suspended from his roles as executive director of Nexperia Holdings and non-executive director of Nexperia after the ministerial order, according to the filing.
The filing added that Nexperia’s daily operations will continue, with the impact of the measures not yet quantifiable.
“The Dutch government’s decision to freeze Nexperia’s global operations under the pretext of ‘national security’ constitutes excessive intervention driven by geopolitical bias, rather than a fact-based risk assessment,” Wingtech said in a deleted WeChat post, which was archived and translated by Chinese policy blog Pekingnology.
It added that since it acquired Nexperia in 2019, Wingtech “has strictly abided by the laws and regulations of all jurisdictions where it operates, maintaining transparent operations and sound governance,” and employs “thousands of local staff” through R&D and manufacturing sites in the Netherlands, Germany and Britain.
A spokesperson from Nexperia told CNBC that the company had no further comments, but that it “complies with all existing laws and regulations, export controls and sanctions regimes,” and remained in regular contact with relevant authorities.
The Netherlands’ move comes after Beijing tightened its restrictions on the export of rare earth elements and magnets Thursday, which could impact Europe’s automotive industry.
The move could also further strain trade relations between China and the Netherlands, following years of restrictions on Dutch company ASML’s exports of advanced semiconductor manufacturing equipment to China.
In 2023, the Netherlands had also investigated Nexperia’s proposed acquisition of chip firm startup Nowi, though the deal was later approved.
FILE PHOTO: Ariel Cohen during a panel at DLD Munich Conference 2020, Europe’s big innovation conference, Alte Kongresshalle, Munich.
Picture Alliance for DLD | Hubert Burda Media | AP
Navan, a developer of corporate travel and expense software, expects its market cap to be as high as $6.5 billion in its IPO, according to an updated regulatory filing on Friday.
The company said it anticipates selling shares at $24 to $26 each. Its valuation in that range would be about $3 billion less than where private investors valued Navan in 2022, when the company announced a $300 million funding round.
CoreWeave, Circle and Figma have led a resurgence in tech IPOs in 2025 after a drought that lasted about three years. Navan filed its original prospectus on Sept. 19, with plans to trade on the Nasdaq under the ticker symbol “NAVN.”
Last week, the U.S. government entered a shutdown that has substantially reduced operations inside of agencies including the SEC. In August, the agency said its electronic filing system, EDGAR, “is operated pursuant to a contract and thus will remain fully functional as long as funding for the contractor remains available through permitted means.”
Cerebras, which makes artificial intelligence chips, withdrew its registration for an IPO days after the shutdown began.
Navan CEO Ariel Cohen and technology chief Ilan Twig started the company under the name TripActions in 2015. It’s based in Palo Alto, California, and had around 3,400 employees at the end of July.
For the July quarter, Navan recorded a $38.6 million net loss on $172 million in revenue, which was up about 29% year over year. Competitors include Expensify, Oracle and SAP. Expensify stock closed at $1.64on Friday, down from its $27 IPO price in 2021.
Navan ranked 39th on CNBC’s 2025 Disruptor 50 list, after also appearing in 2024.