Nasdaq Employs GenAI to Strengthen Market Surveillance

Nasdaq, an exchange operator, is including a GenAI-powered feature in its market surveillance technology.

Nasdaq claims the feature will enhance the efficiency, speed, and quality of market abuse investigations conducted by its customers. It also simplifies the triage and examination process involved in looking into suspected insider dealing and manipulation.

Nasdaq Aims To Enhance Market Surveillance Capabilities

For instance, the technology can create a unified table of the firm’s regulatory filings, summaries, and links to peer, sector, and company news. It can also analyze news sentiment, and identify other factors that may affect any given security, either positively or negatively.

Nasdaq selected AWS’s Amazon Bedrock service to create GenAI apps. During proof-of-concept testing, surveillance analysts calculated a 33% decrease in investigation time, with better overall results.

Nasdaq is currently intending to utilize the GenAI enhanced functionality for its US equity market surveillance.

Nasdaq Strives To Create Value For Its Shareholders

The head of regulatory strategy and innovation of Nasdaq, Tony Sio, highlighted the importance of adopting AI and cloud technology tools. He stated that by utilizing the most recent advancements in artificial intelligence and cloud technology, the firm can improve its response to new threats. It can also provide the global financial system with advanced tools to address market abuse more effectively.

As Nasdaq (NASDAQ: NDAQ) keeps exploring technology in the financial sector with its latest AI feature for market surveillance, investors stay interested in the firm’s financial health.

With approximately $34.83 billion of market capitalization and a 32.15 P/E ratio standing, the Nasdaq is traded at a high earnings multiple. This encourages investors to trust towards its innovative capabilities and growth prospects.

InvestingPro data indicates that over the last twelve months up to Q1 2024, Nasdaq earned $6.205 billion in revenue, with a small decrease of 0.31%.

However, the company remains profitable, with a strong gross profit margin of 66.04% and 29.86% of operating income margin in the same period. These margins show that Nasdaq can effectively manage its services despite its technological improvement.

InvestingPro Tips indicates that Nasdaq has a tradition of rewarding its shareholders, having increased its dividend for 12 straight years. This steady return to investors is supported by a dividend yield of 1.59% as of the latest data. Remarkably, analysts have adjusted their earnings prospects downwards for the imminent period, which could be a factor for potential investors to consider.

A significant factor in Nasdaq’s revenue expansion came from its Solutions division, which saw an impressive 13% yearly rise in revenues. The platform experienced an even more remarkable jump in solutions revenues, increasing by 32%.