K-beauty stocks surged by close to 10% on the 16th as caution mounted over the pace of growth in the artificial intelligence industry, with demand shifting toward companies that offer both earnings stability and growth. Consumer goods stocks with solid downside support also stood out in New York trading overnight.
As of 2:30 p.m. on the 16th, Dalba Global was trading at 174,600 won, up 10.02% from the previous session, according to the Korea Exchange. APR (278470), the leading K-beauty stock, was trading at 325,500 won, up 9.23%, while cosmetics distributor Silicon2 was changing hands at 34,500 won, up 8.49%. Kolmar Korea, an original equipment manufacturer at the heart of the K-beauty value chain, was up 7.10%.
Doubts have been building in domestic and overseas markets over current valuations of AI companies. In the U.S., shares of CoreWeave, a cloud provider specializing in AI, fell more than 15% after the yield on corporate bonds it had issued to expand data centers approached 15% at maturity, bringing its heavy debt burden to the surface. Research firm Gartner projected that cumulative investment in AI infrastructure will reach $7 trillion between 2026 and 2030, while data center revenue will amount to only $3.6 trillion. On the KOSPI the previous day, stocks in the AI value chain fell sharply, including Samsung Electronics (005930), down 9.48%, SK hynix (000660), down 11.06%, Samsung Electro-Mechanics (009150), down 15.36%, and Hanmi Semiconductor (042700), down 11.63%.
The cosmetics industry has been enjoying a boom on the back of solid exports. Share prices weakened in the short term, however, after third-quarter earnings forecasts were revised downward on the won's recent strength. Analysts say the fundamentals of the cosmetics sector remain firm. K-beauty continues to expand overseas, they say, and earnings stability is high because brand operators such as APR and Dalba Global, distributors such as Silicon2 and OEM makers such as Kolmar Korea and Cosmax form a solid ecosystem.
In New York trading overnight, the Dow Jones Industrial Average rose 1.08%, the Standard & Poor's 500 gained 0.33% and the Nasdaq Composite added 0.08%. Caution toward AI-related technology stocks persisted, but a rotation of funds into other sectors lifted share prices, led by consumer goods companies.
"For stocks in the AI value chain, caution will persist and volatility will increase until the next round of earnings announcements," an official in the securities industry said. "There is a need to pay attention to companies with solid downside support."
