Journal of Economic Research & Reviews(JERR)
ISSN: 2771-7763 | DOI: 10.33140/JERR
Impact Factor: 1.3
Kabir Bhushan
Marquette High School, Chesterfield, Missouri, USA
Publications
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Review Article
Market Reactions to Generative AI Announcements: An Event Study Analysis of Abnormal Returns, 2022–2025
Author(s): Kabir Bhushan*
This paper asks a straightforward question: when a major generative AI announcement drops, do markets actually price it right away, or does something more complicated happen? Using standard event study methodology applied to six AI-linked equities (Nvidia, Microsoft, Alphabet, Meta, AMD, and Palantir) across 18 significant generative AI announcements from November 2022 through January 2025, I find that the answer is mostly the latter. Markets react fast and in the right direction, with announcement-day abnormal returns averaging +1.84% and are highly significant, but they do not get it fully right on day one. A statistically significant positive drift on day +1 (+0.71%, p < 0.05) and persistent post-announcement drift following the largest positive-surprise events suggest that generative AI information is incorporated gradually, consistent with conservatism bias among investors. On.. Read More»