[Image: /stdaily/uploads/202608/gen_6a7ac914d0cf38.62853536.png]
NAVER and Kakao, the two giants of the domestic internet platform industry, have released their second-quarter report cards for this year, drawing intense interest from the market.
Executive Summary
In this Q2 earnings release, NAVER achieved its highest-ever quarterly revenue, but its operating profit growth stagnated due to the expansion of AI infrastructure investments.
On the other hand, Kakao recorded its highest-ever operating profit through the divestment of non-core affiliates and cost-efficiency measures, showing a clear contrast between the two companies.
While NAVER is focusing on securing preemptive infrastructure through its partnership with Nvidia, Kakao is gearing up for internal consolidation and agentic AI expansion centered on KakaoTalk.
Market Overview
Today (August 11, 2026), the KOSPI market closed at 6,345.53, up 45.87 points (0.73%) from the previous trading day, and large-cap tech stocks NAVER and Kakao also joined the upward trend.
Amidst the recent high exchange rate (around 1,418.00 KRW/USD) and concerns over a global economic slowdown, foreign investors are showing caution regarding the pace of earnings restructuring for platform tech stocks following large domestic export stocks.
According to the Daily Stock Fear & Greed Index, the KOSPI Fear & Greed Index is currently at the "Fear" level (21.7), which has somewhat stabilized compared to "Extreme Fear" a week ago (17.8) or a month ago (13.8), but still falls short of the "Greed" level (65) from three months ago.
On the other hand, the Nasdaq Fear & Greed Index is currently in the "Greed" phase (64.4), indicating that a psychological decoupling and relative value gap between domestic and overseas tech stocks still exist.
[Image: /stdaily/uploads/202608/gen_6a7ac923947724.24630621.png]
Financial Analysis
NAVER achieved consolidated revenue of 3.3888 trillion KRW in the second quarter, proving its largest-ever top-line scale. However, its operating profit recorded 520.3 billion KRW, a 0.2% decrease year-on-year, impacted by increased AI infrastructure and marketing costs.
In contrast, Kakao carried out intensive restructuring of its affiliates, including classifying Kakao Games as discontinued operations, delivering record profitability with revenue of 2.0985 trillion KRW (YoY +9%) and operating profit of 277.0 billion KRW (YoY +36%).
Below is a comparison of the key business indicators of both companies based on the Q2 2026 earnings release.
| Metric (Q2 2026) | NAVER (035420) | Kakao (035720) |
|---|---|---|
| **Revenue** | 3.3888 tn KRW (YoY +16.2%) | 2.0985 tn KRW (YoY +9.0%) |
| **Operating Profit** | 520.3 bn KRW (YoY -0.2%) | 277.0 bn KRW (YoY +36.0%) |
| **Operating Margin** | 15.4% (QoQ -1.7%p) | 13.0% (YoY +3.0%p) |
| **Closing Price (08-11)** | 214,000 KRW (+1.18%) | 40,700 KRW (+2.91%) |
| **Core Growth Driver** | AI Briefing Ads, Global C2C Growth | Talk Biz Ads & Messaging, Pay Quantum Jump |
Valuation
Currently holding the 22nd position in KOSPI market capitalization, NAVER's 12-month forward price-to-earnings (PER) ratio stands at approximately 18.51x, which is lower than the industry average of 22.13x, remaining in a relatively undervalued phase.
Kakao, which achieved an earnings surprise through its restructuring diet, has a PER of 36.54x, which is high compared to the industry average. Therefore, it needs to prove its substantial value through agentic AI business centered on KakaoTalk in the future.
While the forward PER of the overall KOSPI has decreased through this index correction process, the full-scale inflow of liquidity into large platform growth stocks is highly likely to depend on the visibility of the Bank of Korea's base rate cuts and the stability of the foreign exchange market.
Expert & Institutional Analysis
The global financial investment industry views the $1 billion third-party allotment paid-in capital increase and partnership that NAVER entered with Nvidia in late July as a key asset that will guarantee mid-to-long-term infrastructure competitiveness.
In fact, large asset managers such as BlackRock have recently increased their stake in NAVER to 7.09%, backing the recovery of its long-term platform dominance even amid a short-term profit stagnation phase.
For Kakao, experts positively assess the restructuring strategy of resolving holding company discount risks caused by indiscriminate subsidiary listings. However, they analyze that the growth stagnation in the content sector and initial user adoption of AI agent services will determine the magnitude of the stock price rebound.
Risk Factors
The most threatening factor for NAVER is the crack in its domestic search market share, highlighted by Google App's monthly active users (MAU) reaching 47.02 million last month, surpassing the Naver App (46.84 million) for the first time in history.
In addition, generative AI-related tech investments foretell large-scale capital expenditures (CapEx) until 2027, presenting an ongoing risk of margin erosion that could further pressure margins in the short term.
For Kakao, short-term earnings volatility occurring during the process of divesting subsidiary stakes, along with legal uncertainties surrounding management reform plans, are pointed out as obstacles restricting active net buying by institutional and foreign investors.
Investment Perspective Summary
For investors attracted to short-term profitability recovery and corporate governance rationalization, the turnaround scenario of Kakao, which proved its physical improvement through a rigorous diet, can be a reasonable choice.
On the other hand, for long-term investors who trust the platform lock-in effect through partnerships with global AI leaders and shareholder return policies such as treasury stock cancellation, NAVER's preemptive investment pain period could be interpreted as an opportune time for fractional buying.
As the KOSPI index attempts to bottom out around the 6,300 level, an approach that adjusts exposure whenever macro volatility subsides and the AI-applied business models of both companies are proven through quarterly revenues seems effective.
Investor Checklist Q&A
Q1. What is the main reason for NAVER's flat operating profit despite revenue growth?
A1. It is due to cost pressures from preemptive investments in new business infrastructure, including securing computing power (GPU investment) for generative AI search and personalized recommendations, and expanding 'Npay Connect' offline terminals.
Q2. What is the nature of the diet that led Kakao to record its highest-ever operating profit?
A2. It was driven by classifying Kakao Games as discontinued operations to exclude it from consolidated earnings, actively cutting loss-making businesses, and strictly controlling marketing and labor costs to boost the operating margin to 13%.
Q3. What is the long-term risk of Google's mobile app MAU surpassing Naver?
A3. The weakening dominance in the domestic portal and search market could lead to a slowdown in the growth of advertising and commerce revenues, which are Naver's largest cash cows. Thus, the early stabilization of its next-generation AI search service has become essential.
Q4. When will the results of the strategic partnership with Nvidia's $1 billion investment in Naver begin to manifest?
A4. According to NAVER management, substantial revenue contribution through AI factory collaboration with Nvidia is expected to materialize in earnest starting with the launch of the initial 55MW capacity in the first half of 2027.
Q5. How will the volatility of the exchange rate and foreign liquidity in the second half affect the stock prices of NAVER and Kakao?
A5. The high exchange rate in the 1,410–1,420 KRW range limits investment sentiment for the internet sector, a representative growth industry. However, if macroeconomic uncertainties are resolved and foreign liquidity returns, the rebound momentum as oversold stocks could strengthen.