Diamonds have lost much of their shine in recent years.
Natural diamonds have lost more than half of their value in the past five years. A one-carat stone currently costs an average of $3,898, 51% lower than the average price of $8,007 in 2021, according to data from diamond trading platform Rappaport Group. The Diamond Standard Index, which tracks the price of so-called investment-grade diamonds, hit 2,490 in early August, its lowest level on record. This week it has been hovering just north of 2500 degrees.
Multiple proponents are colluding against diamonds, including the glut of mined stones that have hit the market over the past few years. And while attempts are underway to eliminate the oversupply, another trend is exacerbating the problem: the rise of lab-grown diamonds.
“There’s a lot of doom and gloom with natural diamonds,” Diamond Standard CEO Cormac Kinney told CNBC. “After the overproduction during the coronavirus pandemic, there was a very large overstock in 2023 and 2024, and then sales declined due to lab-grown (diamonds).”
Lab-grown diamonds are gemstones with the same chemical and physical properties as natural diamonds, produced by applying heat and pressure to carbon seeds or carbon-containing gases in a vacuum chamber. Although they grow above ground, they look and feel like stones formed deep within the earth.
The main difference between the two is the price. A nearly colorless lab diamond with very little inclusion clarity and an excellent cut can fetch $450 on Brilliant Earth’s online marketplace, according to a CNBC search. By comparison, prices for natural stone with the same specs range from $2,800 to $3,200. The price difference is primarily due to the resource-intensive method of mining natural diamonds, which requires a lot of fuel and labor.
According to Brilliant Earth, laboratory-grown alternatives are less expensive than natural diamonds at any carat weight. Manufactured stones can cost as much as 90% less than their mined counterparts, but the exact difference in price depends on the stone’s size, cut, and color.
As a result, cash-strapped consumers are flocking to more affordable lab-grown diamonds for things like engagement rings and fashion jewelry, putting pressure on the price of natural stones. According to The Knot 2026 Real Weddings Study, engagement rings with lab-grown center stones accounted for 61% of all engagement ring sales in 2025, an increase of 239% from 2020.
And according to Fortune Business Insights, the lab-grown diamond market is expected to grow to nearly $92 billion by 2034, an increase of more than 200% from the market value of $29.46 billion in 2025.
Diamonds should not be purchased thinking that there is an economic investment (aspect) to them.
corey shifter
Owner of Casale Jewelers
Lab-grown diamonds “open up the opportunity for people to use what they like and get what they want, as opposed to having to create a halo around the center stone because it’s one carat and you want it to look like three carats,” Cory Schifter, owner of New York and New Jersey-based Casale Jewelers, told CNBC. “They could take the extra money they didn’t spend on a five-carat natural gemstone and put it toward their wedding, buy a house, or whatever they want to do.”
The shift to lab-grown alternatives threatens to further reduce the price of natural diamonds.
However, the natural diamond industry has taken notice and is beginning to take steps to increase the price of the lackluster stones.
De Beers Group, a subsidiary of Anglo American that focuses on mining, sorting and grading diamonds, announced in July that it would suspend production at its flagship Venice mine in South Africa for more than two years. This is a move that could restrict supply and drive up prices. Meanwhile, at least two diamond mines have announced they will permanently close in 2026.
“With two of our mines filing for bankruptcy and De Beers themselves announcing that they are closing one of their largest mines, there is a significant disruption to supply,” Kinney told CNBC. “So what we’re seeing now in the wholesale market is price increases for certain qualities (of diamonds), and I think this is the beginning of a recovery.”
Play Lab Diamond Boom
It’s not entirely clear whether the moves by industry giants can stem the bleeding in the natural diamond market, but one thing is clear: lab-grown diamonds are here to stay.
And there are ways for investors to ride the trend.
Raymond James analyst Rick Patel has an Outperform rating. signet jewelershe says, will give him exposure to the lab-grown diamond boom.
“Lab-grown diamonds have been a real win for Signet, especially on the fashion side,” says Patel. “Products with lab diamonds generate approximately three times the (average retail unit price) of other fashion products without lab diamonds. This means that the more lab-grown diamond fashion jewelry sells, the more AUR and same-store sales.”
Signet did not respond to questions about the margins for lab-grown and natural diamonds. However, data from global investment firm Gordon Brothers shows that lab-grown diamonds typically produce a gross profit margin of 60% to 65%, higher than the 40% to 45% gross profit margin of natural diamonds.
SIG Year to Date
Patel noted that Signet brands such as Kay Jewelers and Zales are increasingly adding lab-grown diamonds to simple items such as tennis bracelets, with the idea that they will make more money with each sale. This is a move that could boost the jewelery brand owner’s stock price, he added.
“Let’s say you have a gold-plated tennis bracelet that doesn’t have any stones in it,” Patel says. “If you infuse it with lab-grown diamonds, you can command a much higher price point, and consumers see a lot more value in it.”
In addition to Signet, brilliant earth Another way to express the lab-grown diamond trend. Pandora, which has its own Lab Diamond series, can also see the gemstone boom.
Signet rose 21% in 2026. Signet’s stock had its best trading day in nearly four years on Sept. 9, rising about 24% after the company raised its full-year profit forecast on strong demand for bridal and fashion products. Brilliant Earth is down 20% since the beginning of the year, but is up 27% in the past three months.
Pandora, which is listed on the Copenhagen Stock Exchange, is up nearly 19% since the beginning of the year. The stock is not listed on a U.S. exchange, but can be traded over-the-counter by U.S. investors.
Analysts and diamond industry insiders recommend these stocks rather than investing in actual natural or lab-grown stones.
Diamonds are generally difficult to invest in because there is no standardized spot market. That’s because no two diamonds are alike, making it difficult to assess value based on comparisons.
The diamond market also suffers from liquidity issues. According to a February 2026 report from jewelry market CaratX, diamonds can remain on the secondary market for more than a year, depending on their quality. And when the stones do sell, they often cost less than half of their original retail price, according to some jewelry stores’ websites.
“You shouldn’t buy diamonds thinking there’s a financial investment (aspect) to them,” Schifter, owner of Casale Jewelers, told CNBC. “Why not invest your money in silver or the S&P 500?”
