Verba volant, transcripta manent: what corporate earnings calls reveal about the AI stock rally

Michele Ca' Zorzi, Ana-Simona Manu and Gianluigi Lopardo

No 3093, Working Paper Series from European Central Bank

Abstract: This paper investigates the economic impact of technological innovation, focusing on generative AI (GenAI) following ChatGPT’s release in November 2022. We propose a novel framework leveraging large language models to analyze earnings call transcripts. Our method quantifies firms’ GenAI exposure and classifies sentiment as opportunity, adoption, or risk. Using panel econometric techniques, we assess GenAI exposure’s impact on S&P 500 firms’ financial performance over 2014-2023. We find two main results. First, GenAI exposure rose sharply after ChatGPT’s release, particularly in IT, Consumer Services, and Consumer Discretionary sectors, coinciding with sentiment shifts toward adoption. Second, GenAI exposure significantly influenced stock market performance. Firms with early and high GenAI exposure saw stronger returns, though earnings expectations improved modestly. Panel regressions show a 1 percentage point increase in GenAI exposure led to 0.26% rise in quarterly excess returns. Difference-in-Difference estimates indicate 2.4% average quarterly stock price increases following ChatGPT’s release. JEL Classification: C80, G14, G30, L25, O33

Keywords: artificial intelligence; ChatGPT; earnings call; equity returns; generative AI (search for similar items in EconPapers)
Date: 2025-08
New Economics Papers: this item is included in nep-ain, nep-big and nep-fmk
Note: 343031
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3093~458d28b4bc.en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20253093

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().