Artificial Intelligence Models for Predicting Stock Returns Using Fundamental, Technical, and Entropy-Based...

This study examines the effectiveness of combining semantic intelligence drawn from large language models (LLMs) such as ChatGPT-4o with traditional machine-learning (ML) algorithms to develop predictive portfolio strategies for NASDAQ-100 stocks over the 2020-2025 period. Three different predictive frameworks--fundamental, technical, and entropy-based--are tested through examination of novel combinations of ML- and LLM-derived semantic metrics. The empirical results reveal a considerable divergence in optimal blending methods across the methodologies; namely, the technical methodology exhibits the best performance when using only ML predictions, with around 1978% cumulative returns with monthly rebalancing. In contrast, the fundamental methodology achieves its full potential when it is based primarily on LLM-derived semantic insights. The Entropy methodology is improved by a balanced combination of both semantic and ML signals, thus highlighting the potential of LLMs to improve predictive power by offering interpretative context for complex market interactions. These findings highlight the strategic importance of tailoring the semantic-algorithmic fusion to suit the nature of the predictive data and the investment horizon, with significant implications for portfolio management and future research in financial modeling.