Shares of South Korean internet-platform company Naver surged on Monday, building on gains from the previous session, thanks to its impressive second-quarter earnings and renewed focus on artificial intelligence (AI).
According to FactSet, Naver’s shares rose by as much as 8.1%, reaching 241,500 won ($185.25). This marked the largest daily percentage gain since November. In contrast, the benchmark Kospi index was down by 0.2%.
Despite the challenges stemming from the sluggish online advertising markets and a weak IT sector, Naver reported above-consensus quarterly earnings on Friday.
Analysts are optimistic about Naver’s future prospects, attributing the positive outlook to a potential recovery in the local ad markets and the company’s AI initiatives. Kim Ha-jeong, an analyst at DAOL Investment & Securities, predicts continued growth in Naver’s advertisement sales during the second half of the year. She further anticipates a seasonal pickup in ad demand, particularly in the fourth quarter, along with cost savings contributing to improved earnings.
Mirae Asset Securities analyst Lim Hee-seok expects Naver’s forthcoming AI model, HyperCLOVA X, scheduled for release on August 24, to lead to the development of customized AI tools such as CLOVA for Writing in September and CLOVA Studio for companies in October. This product lineup expansion is expected to drive further growth for Naver. Lim also suggests that reduced labor and marketing costs will contribute to improved earnings for the company.
Overall, Naver’s strong performance in Q2 and its strategic focus on AI have instilled confidence in analysts and investors regarding its future trajectory.