Financial Stress and Its Role in the New Trend of AI Investing

Sandra Matušovičová – University of Economics in Bratislava, Faculty of Economics and Finance, Department of Finance, Dolnozemská cesta 1, 852 35 Bratislava, Slovak Republic

Abstract: Investment asset prices are increasingly more determined not only by economic fundamentals, but also by non-financial behavioral factors, such as the investor sentiment and emotions. One of key emotions in investing is financial stress, which tends to be high during economic crises and low during periods of growth. This paper aims to identify how strong is the impact of financial stress on the growth of technology stock prices during the current AI boom. Using regression analysis and econometric modeling, including a proxy variable of Financial Stress Index (FSI) from the Federal Reserve System of St. Louis, the results showed at 5% level of significance (p < 0.05) a negative correlation with a coefficient of ß1=-605,67 between financial stress and AI stock prices. These findings confirm that lower levels of stress contributed to AI investment growth and provide investors implications to incorporate not purely economic factors in decision-making and investment strategies.

8th International Scientific Conference on Recent Advances in Information Technology, Tourism, Economics, Management and Agriculture – ITEMA 2024 – Selected Papers, Hybrid (Zayed University, Dubai, UAE), October 24, 2024

ITEMA Selected Papers published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia

ITEMA conference partners: Faculty of Economics and Business, University of Maribor, Slovenia; Faculty of Organization and Informatics, University of Zagreb, Varaždin; Faculty of Geography, University of Belgrade, Serbia; Institute of Marketing, Poznan University of Economics and Business, Poland; Faculty of Agriculture, Banat’s University of Agricultural Sciences and Veterinary Medicine ”King Michael I of Romania”, Romania

ITEMA Conference 2024 Selected Papers: ISBN 978-86-80194-90-5, ISSN 2683-5991, DOI: https://doi.org/10.31410/ITEMA.S.P.2024

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission.