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Executive Summary
NAVER is launching a full-scale drive to build a gigawatt (GW)-class global AI factory, backed by a $1 billion equity investment from Nvidia.
This infrastructure performance, powered by Nvidia's Blackwell and next-generation Vera Rubin GPUs, is emerging as a key variable that will determine NAVER's mid- to long-term valuation multiple upside.
However, stagnant operating profits caused by recent increases in infrastructure and marketing costs, coupled with downward pressure on tech stocks due to concerns over US interest rate hikes, are acting as headwinds for a short-term stock price rebound.
Market Overview
On August 31, 2026, the KOSPI closed at 6,820.02, up 0.46% from the previous session, while the KOSDAQ closed lower at 834.29.
Reflecting concerns over an early interest rate hike in the US, the Nasdaq Index closed at 26,402.42, maintaining a tense atmosphere, while the USD/KRW exchange rate remained under upward pressure at 1,370.00 KRW.
Amid this macroeconomic environment, NAVER (035420) closed the day at 216,500 KRW, down 1.81% (4,000 KRW) from the previous day.
Although NAVER's stock price surged temporarily right after Nvidia's massive investment announcement, it has continued to consolidate in the 210,000 KRW range due to a general cooling of investor sentiment in tech stocks and noise surrounding the shareholder eligibility review.
According to Daily Stock's proprietary Fear & Greed Index, the KOSPI is currently in the Neutral (48.5) stage, similar to a week ago (49.6), and the Nasdaq is also in the Neutral (54.4) stage, showing a wait-and-see attitude amid a volatile market.
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Financial Analysis
NAVER's consolidated revenue for the second quarter of 2026 recorded an all-time high of 3.3888 trillion KRW, up 16.2% year-on-year.
Even growth across all business sectors, including Commerce, Fintech, and Contents, appears to have driven the top-line expansion.
On the other hand, Q2 operating profit stood at 520.3 billion KRW, showing almost no change compared to the same period last year, due to increased fixed cost burdens related to AI R&D and GPU infrastructure investments.
Net income rose 41.6% to 704.3 billion KRW, showing a favorable trend driven by easing tax burdens.
| Category (Q2 2026) | Performance (Consolidated) | YoY Change |
|---|---|---|
| **Revenue** | 3.3888 trillion KRW | +16.2% |
| **Operating Profit** | 520.3 billion KRW | Flat (0.0%) |
| **Net Income** | 704.3 billion KRW | +41.6% |
| **2026 Annual Revenue (E)** | 13.7318 trillion KRW | - |
| **2026 Annual Operating Profit (E)** | 2.1770 trillion KRW | - |
Valuation
Currently, NAVER's price-to-earnings (PER) ratio is around 16.9x, and its price-to-book (PBR) ratio is around 1.2x, positioning it at the bottom of its historical band.
This is relatively undervalued compared to the industry average PER of 21.8x, suggesting that platform regulation concerns and margin pressures have been largely priced in.
Industry experts forecast that once the revenue visibility of the AI factory, which begins full-scale operation in 2027, is secured, a multiple re-rating will be possible.
In particular, the high book value per share (BPS) of around 180,000 KRW and shareholder-friendly policies, such as aggressive treasury stock cancellation (3.1% of outstanding shares), strongly support the valuation floor.
Expert & Institutional Analysis
Securities firms generally maintain a positive outlook on NAVER's mid- to long-term strategic direction.
Kyobo Securities maintained its 'Buy' rating and target price of 390,000 KRW, noting that the global AI factory partnership with Nvidia is an integrated model combining capital and technology beyond a simple infrastructure alliance.
Hanwha Investment & Securities also presented a target price of 300,000 KRW, highlighting the multiple upside that AI data centers will unlock, although short-term performance momentum in the second half may be limited.
Regarding foreign capital flows, trading has been somewhat conservative as the exchange rate fluctuates around the 1,370 KRW level, but inflows of spot buying are expected to be determined by the concretization of the Nvidia alliance.
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Risk Factors
The most immediate risk is the potential contraction of global tech stock valuations due to concerns over Fed rate hikes.
In addition, the outcome of the ongoing Fair Trade Act-related fine lawsuit ahead of the acquisition of Dunamu, and whether it will pass the financial authority's major shareholder eligibility review, are cited as corporate governance uncertainties.
It should also be kept in mind that massive infrastructure and power acquisition costs will be pre-invested until the first 55MW AI factory begins operations scheduled for the first half of next year, which may slow down short-term margin improvement.
Investment Perspective Summary
The core conditions for NAVER's stock price rebound boil down to 'when new business numbers start to register' and 'improvement in the macroeconomic environment.'
While gaining a strong ally like Nvidia in the AI infrastructure competition against global Big Tech firms is a clear positive, patience may be required until this translates into actual earnings in 2027.
Therefore, from a long-term investment perspective, a phased approach utilizing the current undervaluation range could be effective, but in the short term, investors must closely monitor exchange rate trends, foreign futures flows, and events such as the Fair Trade Commission lawsuit.
Investor Checklist Q&A
Q1. What is the 'AI Factory' being co-developed by NAVER and Nvidia?
A1. It is an artificial intelligence-dedicated data center and production facility equipped with a massive number of high-performance GPUs that inputs power and data to mass-produce 'tokens,' the core unit of AI services.
Q2. How was Nvidia's equity investment in NAVER carried out?
A2. In July 2026, Nvidia underwent procedures to acquire a roughly 4.5% stake in NAVER by investing approximately $1 billion (1.38 trillion KRW) through a third-party allotment capital increase.
Q3. What is the reason for the stagnant operating profit despite recent revenue growth?
A3. This is due to temporary increases in preemptive construction costs for hyper-scale GPU infrastructure to upgrade AI services and marketing expenditures for global commerce expansion.
Q4. When is the long-term momentum to drive the stock price recovery expected to materialize?
A4. Starting with the initial operation of a 55MW scale in the first half of next year, AI factory and cloud business revenues are expected to become fully visible starting from 2027.
Q5. What are the macroeconomic variables and risks to watch out for when investing?
A5. Key variables include shifts in foreign capital flows due to exchange rate fluctuations, US Fed interest rate guidelines, and the valuation of the Dunamu stake, which is linked to virtual asset market volatility.