May 22, 2023
Contact: Pate McEwen, McCuienp@missouri.edu, 573-882-4870
Researchers at the University of Missouri have identified a correlation between press coverage of artificial intelligence and the stock prices of companies known to use AI. This discovery could be used by investors to improve their portfolios and turn a profit quickly.
“Our findings can help people succeed in investing,” said Kuntala Puktuanthong, professor of finance in the Robert J. Turlaske College of Management and lead author of the study. . “This study shows that when AI starts trending in the news, people can profit by buying stocks. After a month, companies with AI-related developments are more You should get a high profit.”
The research team, which included Dat Mai, a doctoral candidate at MU, and Arka Bandyopadhyay, assistant professor of professional practice at the University of Miami, used AI to scrutinize 3 million New York Times articles and determine when AI I identified what was mentioned. The team then tracked the stock prices of companies known to use AI over the same time period to determine how that news coverage affected their stock prices.
They found that stock prices rose one month after increased coverage of AI, but ultimately fell within five to seven months, making the increases temporary and related to the coverage. This means that it was showing that. That's why Puktuanthong and Mai said it's best to sell stocks related to AI coverage within a month of purchase.
“There are always fluctuations in the stock market, but our research shows that if AI comes up a lot this month, investors will be more likely to buy stocks in companies that use AI heavily and After a week, I realized I should sell the stock.’ It takes a month to make a profit,” Mai said. “This is real-world information that can immediately help people profit from their investments.”
Puktuanthong and Mai said their research is important because it allows investors to immediately apply the strategy.
“People can use our work for themselves,” Puktuanthong said. “Instead of waiting for our own data to be published, they can replicate the work and leverage strategies in real time. This idea is very novel. I'm not aware of any other studies that have looked at how this affects the market and the stock market as a whole.”
As part of the study, the team of researchers developed a company-level “AI-likeness” measure that captures the degree of AI integration within a company. The researchers believe investors and market participants can use this metric to understand the impact of AI adoption on corporate performance beyond the stock market. Going forward, they hope to use this study as a baseline for future research on AI in business.
“AI Narratives and Equity Mispricing” is currently available in pre-publication format on SSRN.
