Leveraging Large Language Models and Data Augmentation in Cognitive Computing to Enhance Stock Price Predictions

Precise stock price forecasting is essential for informed decision-making in financial markets. This study examines the combination of large language models (LLMs) with data augmentation approaches, utilizing improvements in cognitive computing to enhance stock price prediction. Traditional methods rely on structured data and basic time-series analysis. However, new research shows that deep learning and transformer-based architectures can effectively process unstructured financial data, such as news articles and social media sentiment. This study employs models, such as RNN, mBERT, RoBERTa, and GPT-4 based architectures, to illustrate the efficacy of our suggested method in forecasting stock movements. The research employs data augmentation techniques, including synthetic data creation using Generative Pre-trained Transformers, to rectify imbalances in training datasets. We assess metrics like accuracy, F1-score, recall, and precision to verify the models’ performance. We also investigate the influence of preprocessing methods like text normalization and feature engineering. Extensive tests show that transformer models are much better at predicting how stock prices will move than traditional methods. For example, the GPT-4 based model got an F1 score of 0.92 and an accuracy of 0.919, which shows that LLMs have a lot of potential in financial applications.