Words as Value: The Market Premium of AI Disclosure

Over the past decade, artificial intelligence (AI) has rapidly reshaped the business landscape. Now, firms are not only adopting this novel tool but also publicizing their AI efforts through official filings and third-party media coverage. While extensive research has examined the benefits of internal AI usage, little is known about how communication on this usage affects investor perception and consequently market valuation. This study examines the relationship between Dual AI Signaling (annual 10-K reports and AI news coverage) and firm market performance. We hypothesize that heavier signaling corresponds with stronger performance, particularly in the Financial sector and among larger companies. Our data sample comprises 5,643 firm-year observations covering 503 point-in-time S&P 500 constituents from 2015-2025, drawn from SEC EDGAR filings and RavenPack news analytics accessed through Wharton Research Data Services. Employing Tobin’s Q as the performance outcome, with year fixed effects and controls for R&D intensity, leverage, and size, we find that firms with higher Dual AI Signaling Scores (lagged by one year) demonstrated significantly stronger market performance (β = 0.70, p < 0.001). The positive relationship is strongest in the Consumer Staples and Consumer Discretionary sectors and intensifies as firm assets rise (β = 0.24, p < 0.001). Independently, formal disclosures tended to be far more favorable than media attention in achieving greater market performance. For firms and investors, these findings suggest that increased AI communication itself is not a homogeneous advantage but depends considerably on sector and size.