Up 14% This Month, SKT Ignites Telecom Stock Rally: From Last Place to Market Leader in Turnaround Bid

SK Telecom Up 14% This Month After Last Year's 3% Drop
Atmosphere Shifts with Anthropic Stake Revaluation
Will KT and LG Uplus Reverse the Trend with Improved Earnings and Shareholder Returns?

Among the three major telecommunications companies aiming for a turnaround this year after overcoming last year's hacking crisis, SK Telecom was the first to break the silence. Despite lingering concerns over uncertain dividends, the company has made a strong start by successfully investing in a U.S. artificial intelligence (AI) company. Attention is now focused on whether KT and LG Uplus can catch up.

AI Competitiveness Highlighted Amid Expectations for Earnings Recovery

According to the Korea Exchange on January 22, SK Telecom's stock price has surged 14.02% so far this year. This far outpaces KT (+5.13%) and LG Uplus (+4.76%) over the same period. On January 20, SK Telecom even hit a 52-week high of 63,000 won during trading.

Given SK Telecom's stock performance over the past year, this recent rally is a remarkable achievement. In 2025, SK Telecom's stock return was -3.08%, significantly trailing behind the KOSPI (+75.63%) as well as competitors LG Uplus (+43.18%) and KT (+19.73%). The company was inevitably impacted by a hacking incident that led to a massive subscriber exodus and regulatory fines, resulting in deteriorated earnings. In the fourth quarter of 2025, SK Telecom's consolidated operating revenue was 4.4 trillion won (down 3.5% year-on-year), and operating profit was 84.4 billion won (down 66.8%), signaling an "earnings shock."

However, optimism is spreading that SK Telecom, having overcome last year's crisis, will achieve a full earnings recovery in 2026, boosting its stock rebound. From April to July 2025, SK Telecom saw a net subscriber loss approaching 720,000, but since August, the trend has reversed to net gains, turning adversity into opportunity. Kim Jeongchan, a researcher at Korea Investment & Securities, stated, "With the waiver of competitor penalty fees in January 2026, both win-back and new subscribers are increasing, so wireless earnings are also expected to recover." He estimated SK Telecom's revenue for 2026 at 17.7 trillion won (up 3% year-on-year) and operating profit at 1.9 trillion won (up 77%). The number of net new users for SK Telecom in the first quarter of this year is estimated to be about 160,000.

In particular, SK Telecom's new record high on January 20 was driven by its advancement to the second phase of the government-led independent AI foundation model project and the positive news of Anthropic's upcoming IPO. These developments have once again highlighted the company's AI competitiveness. Anthropic, a generative AI company founded in 2021 by former OpenAI researchers, reportedly achieved a valuation of 350 billion dollars (about 515 trillion won) in the pre-IPO stage. SK Telecom, which invested 100 million dollars in Anthropic in 2023, now holds a stake estimated to be worth about 3 trillion won-approximately 23% of SK Telecom's market capitalization.

Researcher Kim noted, "Last year, SK Telecom's estimated AI-related revenue was 740.2 billion won, accounting for only 5.3% of the total, but this year marks the first year of executing the plan toward a cumulative AI investment of 5 trillion won by 2030, and the growth trajectory is sufficiently encouraging." He raised the target stock price from 61,000 won to 71,000 won.

Will KT and LG Uplus Stage a Comeback?

In the case of KT, while it lacks a clear upward momentum like SK Telecom, it is still considered to have the potential to reclaim its leadership in the telecom sector. Like SK Telecom, which benefited from the revaluation of its stake in Anthropic, KT also has opportunities for a revaluation of its stake in Hyundai Motor Group and its real estate assets. In 2022, KT exchanged 7.7% of its treasury shares (worth about 750 billion won) for Hyundai Motor and Hyundai Mobis treasury shares as part of a strategic alliance to lead the future mobility business. With Hyundai Motor Group's stock price soaring recently, KT's valuation gains are estimated to reach 1.4 trillion won.

The diminished appeal of SK Telecom as a dividend stock due to the uncertainty of continued dividends could also serve as a springboard for KT to catch up. KT's expected shareholder return yield for this year is 6.6%, the highest among the three telecom companies, and it is planning to repurchase treasury shares worth 250 billion won in the first half of the year.

LG Uplus, which had the best stock performance among the three telecom companies last year, is also expected to maintain its focus on enhancing shareholder returns and tighten its pursuit this year. A treasury share buyback of about 100 billion won is anticipated, and an increase in dividends per share (DPS) is expected due to a reduction in the number of dividend shares. Researcher Kim projected, "This year, LG Uplus's DPS is expected to be 750 won, with a dividend payout ratio of 40% and a dividend yield of 5.0%. Assuming a shareholder return rate of 55%, an additional treasury share buyback of 120 billion won is possible."