Naver's Stock on the Rise, AI Momentum Begins with Commerce

[Korea Financial Times, Kim JaeHun] After plummeting to KRW 100,000 range at one point, Naver's stock has been on an upward trajectory this year, showing signs of recovery. This rally is attributed to the company's record-breaking performance in 2024 and growing anticipation for the AI-driven services that CEO Choi Soo-Yeon has emphasized. Naver plans to secure AI momentum starting with its commerce business, launching a dedicated AI-based shopping app.

On February 26, Naver's stock closed at KRW 231,500, up KRW 3,000 (1.31%) from the previous day's closing price. Since beginning the year at KRW 151,000 (as of January 2), Naver's stock has steadily risen, surpassing the KRW 200,000 mark.

Securities firms such as DB Financial Investment, SangSangin Securities, Hana Securities, KB Securities, and IBK Investment & Securities have significantly raised their target price for Naver to a range of KRW 280,000–330,000. This reflects investor optimism following Naver’s milestone achievement of exceeding KRW 10 trillion in revenue last year, as well as its plans to implement an 'ON-Service AI' strategy based on HyperCLOVA X.

Lee Seung-Hoon, an analyst at IBK Investment & Securities, commented, "Naver will solidify its position as a leading AI service platform in Korea, with its AI momentum fully materializing this year." Choi Seung-Ho, an analyst at SangSangin Securities, added, "With a forward 12-month price-to-earnings ratio (PER) of 18x, Naver's stock remains undervalued given its domestic market share recovery and the visible progress in AI commercialization."

As Naver's core business and flagship B2C segment, commerce is the first area where the company is focusing its AI-driven ON-Service strategy. The key initiative is the 'Naver Plus Store,' an independent AI-based shopping app slated for launch in Q1.

The Naver Plus Store is designed to offer hyper-personalized recommendations through AI. While Naver Shopping traditionally relied on user searches for goal-oriented purchases, this new platform aims to enhance discovery-based shopping experiences by leveraging user data and AI.


At a business briefing held at Naver’s headquarters on February 25, Jung Kyung-Hwa, Product Leader of Naver Plus Store, stated, "Hyper-personalized shopping experiences are an unstoppable trend, embraced by global commerce giants such as Amazon and Alibaba. Our Smart Plus Store, set to launch in Q1, will leverage our extensive search data, 3,000 partner brands, and advanced AI technology to deliver a unique shopping experience for all 50 million Koreans."

A key feature of Naver Plus Store's hyper-personalization is the 'AI Shopping Guide.' This tool eliminates the need for users to conduct multiple searches by analyzing their behavior, context, and preferences to provide tailored purchase recommendations.

The AI Shopping Guide is powered by data from various Naver services, including blogs, Knowledge iN, and clips, in addition to existing Naver Shopping data. This enables a more refined and personalized shopping experience.

“We will initially launch the AI shopping guide on NAVER Plus Store as a beta version,” said Lee Jung-tae, NAVER Shopping Search & Discovery Leader. ”We will upgrade it to a form that takes into account the characteristics of products and the context of the user's purchase by incorporating data that only NAVER has, such as blogs.”

The securities market also expects the NAVER Plus Store to have a positive impact on earnings growth as well as the enhancement of NAVER's AI services.

Jung Ui-Hoon, an analyst at Eugene Investment & Securities, remarked, "With the upcoming launch of Naver Plus Store, the commerce segment is poised to drive Naver's overall earnings growth. Additionally, ON-Service AI applied across different business sectors is expected to enhance service quality."

Kim JaeHun (rlqm93@fntimes.com)