The share prices of major domestic software (SW) corporations are showing an upward trend, driven by solid performances and the artificial intelligence (AI) rally originating from the United States. As the center of the AI cycle, which is leading the global stock market, shifts from semiconductors to software, domestic software stocks are also enjoying the benefits. However, some point out that domestic related stocks have repeatedly experienced sharp declines during trading, continuing to exhibit characteristics of 'thematic stocks.'
According to the Korea Exchange on the 24th, the share prices of most major domestic SW corporations have risen over the past three months. During this period, Eastsoft recorded the largest increase of 78.7%, rising from 14,380 won to 25,700 won. In the same period, Saltlux rose 58.9% from 15,600 won to 24,800 won, while Hancom increased 23.6% from 17,950 won to 22,200 won. Emro and Douzone Bizon also saw increases of 19.9% and 18.6%, respectively, over the three months.
The fact that software corporations have reported strong performance has had a positive impact. Douzone Bizon recorded 97 billion won in revenue and 20.1 billion won in operating profit for the third quarter of this year, representing growth of 14.5% and 29.4%, respectively, compared to the same period last year. In the same timeframe, Emro achieved operating profit of 4.39 billion won, which is an increase of 238.4% compared to the same period last year, marking the highest quarterly result ever. Hancom recorded revenue of 71.2 billion won and operating profit of 8.5 billion won in the third quarter of this year, which represents increases of 24.9% and 160%, respectively, compared to the same period last year.
Recently, software companies have been highlighted as potential leaders in the next wave of AI stocks on the U.S. stock market. It seems that domestic related stocks have also been influenced by this trend. The U.S. AI software corporation Palantir has seen its share price rise by 117% over the past three months. This has occurred as the valuation of NVIDIA, which was the previous AI leader, has increased and Palantir has been raising expectations with its AI-related performance. Analysts suggest that the positive impact is also due to the fact that software is less affected by the high tariffs imposed by the elected U.S. President Donald Trump, unlike the hardware sector.
However, some point out that software stocks are unable to maintain their upward momentum, remaining bound by characteristics of 'thematic stocks.' Indeed, Douzone Bizon soared 19.1% in a single day after announcing its challenge to become the fourth internet-only bank in South Korea last April, but then it declined. Similarly, Hancom saw its stock price double to 38,450 won within a month after announcing its intent to enter the AI business at the beginning of this year, but it ultimately resulted in a 'flash in the pan'.
These corporations are strategizing to continue their upward trend, focusing on expanding AI services next year. Douzone Bizon plans to enhance cloud and AI-related technologies and expand into various industries, including law, healthcare, and public sectors. It is also intensifying its overseas expansion through strategic partnerships with global big tech companies like Amazon Web Services (AWS) and Microsoft (MS). Hancom has launched its natural language-based AI assistant 'Hancom Assistant' and the AI-based knowledge base 'Hancompedia,' while Polaris Office plans to expand its AI document creation support services through a base of 130 million global users.
Emro's AI solution 'Smart Item Doctor,' implemented with its own technology, is drawing interest from both domestic and foreign corporations. This technology utilizes natural language processing to automatically analyze and classify the vast product data accumulated in corporate purchasing systems based on similarity. It has registered patents in Korea and Japan, and patent registration has also been confirmed in the United States. Eastsoft has announced plans to become a game changer in the future AI search market by launching its advanced AI search engine 'Ellyn,' based on a large language model (LLM).
The securities market is also expressing positive outlooks regarding the AI strategies of these software corporations. Ahn So-eun, a researcher at KB Securities, noted, 'As the generative AI market grows, demand for AI semiconductors will continue. However, there are limits to profit momentum and burdens from export regulations.' On the other hand, 'Software can become a new leading stock as AI-based services are launched in earnest and corporate investment resumes following the resolution of presidential uncertainties,' she added.