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AI investment news did not lift FTSE 100 share prices, study of 138 announcements finds

Study title: The effect of AI investment announcements on adopting companies abnormal returns: A critical analysis of the UK market

An event study of 138 AI investment announcements made by 53 FTSE 100 companies between 2019 and 2023 found an average announcement-day stock reaction of 0.114%. That is marginally positive but not statistically significant, and both parametric and non-parametric tests agreed.

Read the study abstract

While artificial intelligence (AI) has become increasingly prevalent, empirical evidence on its impact on firm value is limited. This inaugural UK market study uses event study methodology to assess stock market reactions to AI investment announcements by FTSE 100 companies from 2019-2023. Analysing 138 announcements from 53 companies, the research reveals that AI investments have a marginally positive, but statistically insignificant impact of 0.114% on the announcement day, affirmed by both parametric and non-…

Truvace record2 min read1 sourceEvidence: Moderate · 60/100 — Observational study · n = 138 · 1 independent sourcePeer-reviewedTRV-2026-2402 · cite or check it
The effect of AI investment announcements on adopting companies abnormal returns: A critical analysis of the UK market"Brainstorming" by kevin dooley, CC BY 2.0.

In brief

The effect varied by firm type. High credit rating firms and early adopters saw significantly negative impacts on firm value, which the author reads as investor risk-aversion and tentative evidence of a second-mover advantage.

Industry and the type of AI investment strongly influenced returns, and larger firms had more negative returns than smaller ones. The study is described as the first of its kind in the UK market, so it offers a baseline for later work.

Main points

  1. The sample covers 138 AI investment announcements from 53 FTSE 100 companies between 2019 and 2023.
  2. The average announcement-day effect was 0.114%, positive but statistically insignificant.
  3. Both parametric and non-parametric tests confirmed the insignificant result.
  4. High credit rating firms and early adopters experienced significantly negative effects on firm value.
  5. Larger firms had more negative returns than smaller firms, confirming a size effect.
  6. Industry and the type of AI investment significantly influenced returns.
  7. EBITDA margins and cyber risk ratings did not significantly affect returns.

The problem

A study of 138 AI investment announcements by 53 FTSE 100 companies found no statistically significant announcement-day share-price gain (0.114%), and high credit rating firms and early adopters saw significantly negative effects.

The full story

The research uses event study methodology to measure how stock markets reacted on the day FTSE 100 companies announced AI investments. It is presented as the first such study of the UK market, filling a gap in empirical evidence on how AI affects firm value.

Across all 138 announcements, the average reaction was a small 0.114% gain that could not be distinguished from zero. Subsample analysis showed the picture was less uniform: high credit rating firms and early adopters saw significantly negative reactions.

Cross-sectional analysis found that industry and AI investment type mattered, and that larger firms fared worse than smaller ones. Profitability, measured by EBITDA margins, and cyber risk ratings made no significant difference.

Sources

  1. Peer-reviewedThe North American Journal of Economics and Finance2027-01-01

The debate