Naver shares soar on president's AI support policy

The Naver logo is displayed at its headquarters in Seongnam, Gyeonggi Province, May 8. Yonhap

Naver is expanding its presence on the stock market, climbing to fifth on the list of large caps, as the internet giant is closely linked to President Lee Jae Myung’s initiative for a sovereign artificial intelligence (AI), according to market analysts, Tuesday.

The company’s rally was also accelerated by the nomination of Han Seong-sook as the minister of small and medium-sized enterprises (SMEs) and startups, and the appointment of Ha Jung-woo as the senior presidential secretary for AI — both tech experts from Naver.

Naver is one of a few domestic companies that have indigenously developed technologies associated with a sovereign AI.

The term refers to a nation’s capabilities to create AI using its own infrastructure, data, workforce and business networks.

From left are Han Seong-sook, the nominee for minister of small and medium-sized enterprises (SMEs) and startups, and Ha Jung-woo, senior presidential secretary for artificial intelligence (AI). Yonhap

The share price of Naver has jumped more than 50 percent since Lee began his term on June 4.

Naver, after remaining out of the top 10 on the list of the large caps earlier this year, has been steadily moving upward and has ranked fifth since Monday.

Its market capitalization amounted to 46.02 trillion won ($33.81 billion) Tuesday, trailing Samsung Electronics at 358.13 trillion won, SK hynix at 202.74 trillion won, Samsung Biologics at 71.45 trillion won and LG Energy Solution at 70.31 trillion won.

Its share price surge is also considered noteworthy as it overtook Hyundai Motor, Hanwha Aerospace and Doosan Enerbility, which lead the auto, defense and nuclear plant markets, respectively.

“Naver is likely to secure fifth place for the time being,” said Ahn Jae-min, a researcher at NH Investment & Securities.

The analyst projected an increase in Naver’s target stock price from 280,000 won to 380,000 won. “The company’s upward trajectory is likely to go on, with regard to Lee’s AI policy for next five years,” Ahn said.

Market observers also attributed Naver’s rally to the Lee government’s favoring of tech experts from Naver.

Han, former Naver CEO from 2017 to 2022, was tapped to lead the Ministry of SMEs and Startups in the Lee administration’s first Cabinet lineup announced Monday.

A key research leader at Naver’s AI division for the past nine years, Ha was appointed as the Lee government’s first senior presidential secretary for AI on June 15.

“I don’t think it’s common for two persons from the same private company to take a government’s key posts,” said Jung Eui-jung, head of the Korean Stockholders’ Alliance. “The cases of Han and Ha reflect Naver’s growth potential under the current government, and I bet that more investors will buy Naver stocks.”

In particular, Jung said Ha’s hiring at the presidential office shows “a strong commitment for public-private sector cooperation,” adding, “It is highly unusual for a private sector AI expert to move directly into a top policy position at the presidential office.”