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[Alpha Biz= Paul Lee] NAVER and Kakao are struggling to rebound in the stock market despite improving earnings, as investors remain skeptical about their future growth. While the KOSPI has surged 65% this year, NAVER and Kakao shares have declined 14% and 22%, respectively, significantly underperforming the broader market.

NAVER delivered record first-quarter results, with revenue surpassing KRW 3 trillion for the first time and operating profit rising year-on-year. However, profitability has come under pressure due to increased marketing spending and growing investments in AI infrastructure. Uncertainty over when these AI investments will generate meaningful returns, along with regulatory delays in new businesses, continues to weigh on investor sentiment.

Kakao is also expected to post improved earnings, driven by growth in its core businesses. Nevertheless, its AI-focused “super app” strategy has yet to demonstrate clear monetization, and user engagement remains below expectations. In addition, lingering management uncertainties tied to past legal risks have weakened momentum for new growth initiatives.

Analysts say the key issue for both companies is not current performance but the lack of a convincing long-term growth narrative. Until NAVER and Kakao can prove that AI and new services can translate into sustainable revenue, their stock recovery is likely to remain limited.

 

 

 

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