THE IMPACT OF AI ON IPO VALUATIONS AND DECISION-MAKING

Abstract

The integration of Artificial Intelligence (AI) into financial markets is reshaping traditional practices, particularly in the realm of Initial Public Offerings (IPOs). This paper explores the profound impact of AI on IPO valuations and decision-making, focusing on how advanced machine learning algorithms and sentiment analysis tools optimize pricing strategies, market timing, and stakeholder engagement. Through a combination of empirical data analysis and sentiment mapping across key stakeholders - including investors, company executives, and analysts - this study reveals how AI improves IPO valuation accuracy while highlighting sector-specific sentiment trends. Graphical
representations demonstrate the correlation between sentiment and valuation, showing that positive
sentiment often leads to higher valuations, whereas neutral or negative sentiment correlates with more
conservative pricing. Additionally, the study addresses the ethical and regulatory challenges that arise
from relying on AI in high-stakes financial decisions. By examining AI-driven IPO case studies, this
research provides a comprehensive understanding of how AI is transforming IPO processes, offering
actionable insights into the future of capital markets in an increasingly digital environment.