SK Telecom's 5.78% Plunge: Earnings Woes and AI Ambitions Collide

Summary
• SK Telecom (SKM) plunges 5.78% to $28.37, its lowest since 2023
• Earnings report reveals 73% net income drop and 41% operating income decline
• 5G subscriber growth and AI data center expansion offset weak financials
• RSI at 95.19 signals overbought conditions, while MACD crosses above signal line

SK Telecom’s stock is in freefall after a brutal earnings report, with a 5.78% intraday drop erasing nearly $1.8 billion in market cap. The plunge follows a 73% net income collapse and 41% operating income decline, yet the company’s 5G subscriber growth and AI data center momentum hint at a complex narrative. Traders are now parsing technical signals and options data to gauge whether this selloff is a buying opportunity or a deeper crisis.
Earnings Shockwaves and Strategic AI Pivots
SK Telecom’s 5.78% drop stems from a catastrophic earnings report: net income plummeted 73% to KRW 375.1 billion, while operating income fell 41.1% to KRW 1.0732 trillion. The decline was driven by a cybersecurity incident fallout, a divested subsidiary, and costly customer retention programs. However, the company’s AI-driven AI Data Center (AIDC) revenue surged 34.9% to KRW 519.9 billion, and 5G subscribers hit 17.49 million. This duality—weak earnings vs. strategic AI progress—has created a volatile trading environment, with investors weighing short-term pain against long-term AI potential.

Wireless Sector Volatility as Verizon Falters
The Wireless Telecommunications Services sector is in turmoil, with SK Telecom’s 5.78% drop mirroring broader industry weakness. Sector leader Verizon (VZ) fell 1.55% despite reporting 616,000 postpaid phone net adds in Q4. The sector’s struggles reflect margin erosion from 5G infrastructure costs, supply chain bottlenecks, and aggressive competition. SK Telecom’s AI-driven AIDC expansion contrasts with Verizon’s focus on 5G subscriber growth, but both face similar profitability pressures. The Zacks Wireless Non-US industry’s 51.7% annual gain masks underlying fragility.

Options Playbook: Capitalizing on Volatility and AI Hopes
• 200-day MA: 21.68 (well below current price), RSI: 95.19 (overbought), MACD: 2.31 (bullish), Bollinger Bands: 31.50 (upper), 24.52 (middle), 17.54 (lower)
• Short-term bullish trend, long-term ranging

SK Telecom’s technicals suggest a volatile short-term path but a long-term range-bound profile. The RSI at 95.19 indicates overbought conditions, while the MACD (2.31) crosses above the signal line (1.75), hinting at near-term momentum. Key support levels at 24.52 (200-day MA) and 17.54 (lower Bollinger Band) could dictate direction. The 52-week high of 30.29 remains a critical resistance.

Top Options Contracts:
• SKM20260320C30: Call option with 30 strike, expiring March 20, 2026
- IV: 60.22% (moderate), Leverage: 16.72%, Delta: 0.437 (moderate), Theta: -0.0272 (strong time decay), Gamma: 0.0668 (high sensitivity), Turnover: 92,502
- Payoff at 5% downside (27.00): Max(0, 27.00 - 30) = $0.00 (break-even)
- Why it stands out: High leverage and gamma make it ideal for a rebound scenario, with moderate IV ensuring cost efficiency.
• SKM20260618C30: Call option with 30 strike, expiring June 18, 2026
- IV: 59.39% (moderate), Leverage: 8.36%, Delta: 0.508 (moderate), Theta: -0.0148 (moderate decay), Gamma: 0.0386 (moderate sensitivity), Turnover: 16,678
- Payoff at 5% downside (27.00): Max(0, 27.00 - 30) = $0.00 (break-even)
- Why it stands out: Longer-dated contract with balanced risk/reward, ideal for a gradual recovery in AI-driven AIDC growth.

Trading Setup: Aggressive bulls may consider SKM20260320C30 into a bounce above $24.52 (200-day MA). If $24.52 breaks, SKM20260618C30 offers a safer, longer-term play on AI-driven recovery.

Backtest SK Telecom Stock Performance
The backtest of SKM's performance after an intraday plunge of -6% from 2022 to the present shows mixed results. While the stock experienced a maximum return of 0.11% over 30 days, the overall trend was negative, with a 30-day return of -0.38% and a 10-day return of -0.12%. The win rates for 3, 10, and 30 days were 51.50%, 46.58%, and 44.23%, respectively. These figures suggest that while there were opportunities for gains, they were not consistently positive, and the stock faced challenges in the aftermath of the intraday plunge.

AI-Driven Rebound or Earnings Abyss? Watch These Levels
SK Telecom’s 5.78% drop reflects a clash between short-term earnings pain and long-term AI ambitions. While the 200-day MA at 21.68 and Bollinger Band support at 17.54 offer potential floors, the company’s AI data center growth and 5G subscriber momentum could fuel a rebound. Traders should monitor the 24.52 (200-day MA) and 30.29 (52-week high) levels. Sector leader Verizon’s -1.55% decline underscores industry-wide pressures, but SK Telecom’s AI-driven strategy may differentiate it. Action: Buy SKM20260320C30 if $24.52 holds; exit if 22.50 breaks.