SK Telecom: The Dark Horse of the AI Race

South Korea: An AI Powerhouse in the Making

In the global, cutthroat race for artificial intelligence domination, the United States and China garner the most attention due to their sheer size and long history of technological advancement. However, it would be a mistake for investors to overlook South Korea. In fact, South Korea has all the ingredients necessary to be a top player in the AI revolution, including manufacturing prowess (SK has the highest density of industrial robots in the world), semiconductor dominance (Samsung, SK Hynix), and a strong consumer electronics ecosystem/infrastructure that can be used to run AI applications. Additionally, the South Korean government has approved a sizable $71.5B investment through 2030 to ensure South Korea becomes a dominant player in the race for AI supremacy.

SK Telecom: The South Korean AI Leader

With a market share of ~50% and 23 million clients,SK Telecom (SKM) is South Korea’s largest telecommunications company. Similar to AT&T (T), SKM is a leader in wireless, 5G, internet, and IoT services. However, unlike most legacy telecom companies which are content to grow slowly and generate predictable cash flow, SKM is transforming into an AI powerhouse. The company has three main AI verticals, including:

· Infrastructure: SKM builds and operates the AI data centers required to train complex AI models.

· In-House AI Optimization: SKM is leveraging AI in-house to optimize its mobile traffic and contact centers for enterprise clients.

· Agentic AI: SKM is an early Agentic AI leader. Its flagship AI agent, A-Dot, is a personal assistant that can handle everything from real-time translation to sleep tracking. Recently, NVIDIA (NVDA) CEO Jensen Huang called Agentic AI a “multi-trillion-dollar opportunity.”

SKM: An Early Anthropic Investor

In addition to its in-house AI efforts, SK Telecom made one of the most astute and timely private AI investments among publicly traded companies. In 2023, SKM invested $100 million into AI start-up Anthropic. At the time, Anthropic’s valuation was ~$5 billion. Since then, Anthropic has released several groundbreaking products while its valuation has swelled to ~$380 billion!

Today, SKM’s stake is likely to be valued at ~$2 billion. With a valuation of $11.54 billion total, SKM’s Anthropic investment should move the needle. Meanwhile, recent activity suggests that Anthropic is targeting an IPO date in the second half of 2026. Should the IPO occur, it will be one of the most anticipated IPOs in years and will likely drive its valuation even higher (thus, increasing SKM’s stake).

SK Telecom: Wall Street is Bullish

SKM earns a best-possible Zacks Rank #1 (Strong Buy). Meanwhile, Wall Street expects its YoY EPS growth rate to explode to 283.10% in 2026.

Image Source: Zacks Investment Research

SKM: Bullish Price Action

While many domestic AI stocks have succumbed to market volatility, SKM shares have outperformed, registering gains of 40.6% YTD versus the S&P 500’s -5.1%.

Image Source: Zacks Investment Research

SKM shares currently offer investors a juicy reward-to-risk setup as they pull back uniformly to the rising 50-day moving average.

Image Source: TradingView

Bottom Line

South Korea is an AI-first nation capable of competing on the technological world stage. Between its AI-first mindset and its prudent Anthropic investment, SKM is an AI leader in the making.

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This article originally published on Zacks Investment Research (zacks.com).

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