Naver Shares Extend Gains on Earnings and AI Hopes

By Kwanwoo Jun

Naver's shares climbed early Monday, extending gains to a second session on its second-quarter earnings beat and artificial-intelligence push.

Shares of the South Korean internet-platform company rose as much as 8.1% to 241,500 won ($185.25), on course for their sharpest daily percentage gain since November, according to FactSet.

The benchmark Kospi index was recently 0.2% lower.

Naver on Friday reported above-consensus quarterly earnings despite headwinds from the sluggish online advertising markets and a weak IT sector.

Analysts largely bet that the company could gain from a recovery in the local-ad markets, with its AI push set to be a catalyst for its share price.

DAOL Investment & Securities analyst Kim Ha-jeong said in a research note Monday that she expects Naver's advertisement sales to continue to grow in the second half of the year.

The company could enjoy a strong seasonal pickup in ad demand, especially in the fourth quarter, and get an earnings boost from cost savings, she said.

Mirae Asset Securities analyst Lim Hee-seok said in a Monday research note that he expects Naver's new AI model, HyperCLOVA X, due out on Aug. 24, to result in follow-up customized AI tools, including CLOVA for Writing in September and CLOVA Studio for companies in October, which should help boost growth.

The company could also continue to improve earnings on reduced labor and marketing costs, Lim said.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

August 07, 2023 00:10 ET (04:10 GMT)

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