South Korea’s auto giants Hyundai Motor and Kia sent shockwaves through the markets on February 25, 2026, with their share prices surging to fresh highs—an unmistakable signal that investor confidence in the nation’s automotive sector is running hot. By 9:44 AM KST, Hyundai Motor’s stock was trading at 562,000 KRW, up 7.25% from the previous day, while Kia’s shares jumped an even more dramatic 13.91% to 198,200 KRW, according to Global Economic. Just minutes earlier, at 9:33 AM, Hankyung reported that Hyundai Motor was up 5.15% at 551,000 KRW and Kia had soared 10.92% to 193,000 KRW, even touching an intraday high of 197,000 KRW—a new 52-week record for the company.
What’s behind this bullish momentum? It’s a potent mix of upgraded analyst forecasts, bold new investment strategies, and the tantalizing promise of cutting-edge AI infrastructure—all unfolding against a backdrop of lingering trade tensions with the United States. The story, as it turns out, is as much about South Korea’s technological ambitions as it is about the ebb and flow of global economic policy.
Analyst optimism has played a major role in fueling the rally. Daol Investment & Securities, a prominent brokerage, raised Kia’s target stock price from 210,000 KRW to 250,000 KRW, citing rising profit visibility for 2026. Researcher Yu Ji-woong explained, “Profit visibility for this year has been steadily increasing compared to the start of the year,” and noted that average selling price estimates for both the global and U.S. markets have been revised upward by 1.0% and 2.6%, respectively. Yu also highlighted that the construction of an AI data center for autonomous driving synthetic data training is at the heart of Hyundai Motor Group’s latest investment push, calling it “a key factor in the speed of autonomous driving learning.” He added, “We assess this as a core element for a multiple revaluation,” and suggested fair value targets of 740,000 KRW for Hyundai Motor and 250,000 KRW for Kia.
Heungkuk Securities, another major player in the financial sector, also revised its outlook, bumping Hyundai Motor’s target price up to 700,000 KRW. The brokerage pointed to the expected full-scale production of the Atlas and the deployment of RMAC in 2028, emphasizing that detailed plans for learning, verification, and field deployment are taking shape. According to Heungkuk Securities, Hyundai Motor Group’s captive production base—known as HMGMA—sets it apart from competitors by allowing for early reference acquisition and the accumulation of operational data. “This is a differentiating factor,” the firm noted in its analysis.
But numbers and forecasts only tell part of the story. There’s a real sense of transformation underway in South Korea’s auto industry, with Hyundai Motor Group at the forefront. The group recently announced a massive 10 trillion KRW investment in Saemangeum, North Jeolla Province, a move that’s already making waves in both financial and tech circles. The plan? To potentially use the site as an AI data center, a pivot that signals a strategic shift from traditional automobile production to AI-driven infrastructure. As Yu Ji-woong put it, “The core of this investment is the construction of an AI data center for autonomous driving synthetic data training, which is a key factor in the speed of autonomous driving learning.”
This isn’t Hyundai’s first foray into large-scale investments. Back in 2014, the company poured 10 trillion KRW into a Korea Electric Power Corporation site—a move that, at the time, led to a period of undervaluation. But since 2021, Hyundai Motor’s capital efficiency has improved dramatically, and the company is now being recognized for its forward-thinking approach. According to Hankyung, “If Hyundai Motor utilizes Blackwell GPUs, it could reach Tesla-level training infrastructure.” That’s no small feat, considering Tesla’s reputation as a global leader in autonomous vehicle technology.
Of course, even as Hyundai and Kia look to the future with optimism, old challenges persist. Chief among them: the ongoing risk of tariffs and trade disputes with the United States. Hyundai Motor Group President Sung Kim recently disclosed that the company suffered a financial blow of 7.2 trillion KRW (roughly 4.98 billion USD) last year due to U.S. tariffs. And the threat isn’t going away. Although South Korea and the U.S. agreed to reduce the initial 25% mutual tariff to 15% starting in November 2025, former President Donald Trump has threatened to reimpose the 25% tariff if the South Korean National Assembly continues to delay passage of a special investment law.
According to Hankyung, “If tariffs are raised back to 25%, the financial damage could increase further in 2026.” The uncertainty is compounded by recent U.S. Supreme Court rulings and Trump’s strong opposition, which have injected a fresh dose of volatility into the market. As a result, both investors and company executives are keeping a wary eye on Washington, knowing that the next round of policy decisions could have a profound impact on the sector’s bottom line.
Despite these headwinds, the mood among analysts remains upbeat. The consensus is that Hyundai Motor and Kia are well-positioned to weather the storm, thanks to their aggressive investment in AI and autonomous driving technologies. The group’s strategy of leveraging its captive production base and accumulating operational data is seen as a major competitive advantage, one that could help insulate it from external shocks.
Market watchers are also encouraged by the companies’ ability to adapt quickly to shifting economic landscapes. Hyundai Motor’s improved capital efficiency since 2021 is a testament to its resilience, and the company’s willingness to bet big on AI infrastructure suggests it’s not content to simply follow the pack. Instead, it’s aiming to set the pace for the entire industry.
For Kia, the story is equally compelling. The company’s rapid ascent to a new 52-week high reflects not just favorable market conditions, but also a broader sense that Korean automakers are entering a new era of innovation and global competitiveness. As Daol Investment & Securities pointed out, the increase in average selling prices in both global and U.S. markets is a clear sign that demand for Korean vehicles remains robust, even in the face of economic and geopolitical uncertainty.
Still, no one is taking success for granted. The specter of renewed tariffs looms large, and the outcome of ongoing negotiations between Seoul and Washington will likely determine whether Hyundai Motor and Kia can sustain their momentum in the months ahead. For now, though, the companies’ bold bets on AI and their willingness to reinvent themselves appear to be paying off—at least as far as the stock market is concerned.
As the dust settles on a dramatic day of trading, one thing is clear: South Korea’s automotive industry is at a crossroads, poised between the promise of technological transformation and the risks of global trade friction. Investors, analysts, and executives alike will be watching closely to see which road the industry ultimately takes.