Construction stocks rally across the board... GS E&C soars nearly 10% on data center hopes [Stock NOW]

[Financial News] Construction stocks are rising in tandem in early trading on the 2nd. Expectations of increased investment in data centers, fueled by the spread of the artificial intelligence (AI) industry, are spreading across the construction sector, and construction companies with relevant project experience are attracting market attention. According to the Korea Exchange (KRX), as of 9:31 a.m. that day, the KOSPI construction industry index was up 4.37% from the previous trading day. It was the biggest gain among all KOSPI sector indexes that day.
Among individual stocks, GS E&C stood out, trading up 9.62% at 28,500 won. Buying also flowed into major construction stocks, with Hyundai Engineering and Construction posting a gain in the 5% range.
The market is increasingly viewing expanded investment in infrastructure, including AI data centers, as a new growth driver for the construction sector. Unlike ordinary buildings, data centers require advanced construction capabilities in areas such as power, cooling and facilities, prompting expectations that large construction companies with relevant project records and technical expertise could benefit.
GS E&C is attracting attention as a company with a track record in data center construction. In a report released that day, Lee Eun-sang, an analyst at NH Investment & Securities, assessed that GS E&C’s data center business was highly likely to expand into partnership models with a range of sponsors.
He went on to analyze: “If global Big Tech companies expand their investment in domestic data centers, using Korea as a hub in Northeast Asia, they are likely to choose proven Tier 1 construction firms.”
GS E&C has built projects including the LG Gasan Data Center and Naver Chuncheon Data Center. Its subsidiary Xi C&A also has a track record in projects such as the LG Uplus Pyeongchon New Town Data Center and Busan Global Center. NH Investment & Securities said these project credentials could give the company a competitive edge as global Big Tech expands investment in Korea in the future.
However, expectations of gains across the sector should be distinguished from improvements in individual companies’ earnings. NH Investment & Securities maintained its Buy recommendation on GS E&C but cut its target price by 11%, from 45,000 won to 40,000 won.
This reflected a lower estimate for next year’s operating profit, taking into account weak plant orders and the possibility of delays in follow-on orders for the Donghae Data Center.
Brokerage analysts say further gains in the construction sector will depend on whether expectations for new infrastructure investment, including data centers, translate into actual orders. The focus is expected to shift toward identifying companies whose growth is backed by order backlogs and improved earnings, rather than mere theme-driven optimism.

[email protected] Kang Jung-mo Reporter