NVIDIA plans to take a stake in Naver, strengthening the credibility of the AI Factory strategy

Overview

This report is Bernstein's Quick Take on Naver. The core event is NVIDIA's proposed subscription of shares worth about USD 1 billion to become a strategic shareholder of Naver. The report argues that this event further aligns Naver's interests with chip suppliers, infrastructure capital, and AI ecosystem partners, and serves as important validation of Naver's AI Factory and partnership-driven neocloud model.

Core views

The report's core view is that NVIDIA's stake should not be simply understood as a financial investment, but rather as strategic synergy created by the combination of supplier, partner, and shareholder roles. Naver's AI Factory is unlikely to rely entirely on its own balance sheet for financing, and is more likely to advance through a model in which infrastructure investors provide capital, chipmakers support compute deployment, and model and ecosystem partners contribute demand and intelligent capabilities. NVIDIA's equity participation is expected to improve market confidence in demand visibility, hardware procurement, and long-term ecosystem support.

Analysis framework

The report uses an event-driven analysis and strategic financing framework, assessing how NVIDIA's stake affects the execution credibility of Naver's AI Factory, the possibility of SPV financing, the introduction of external capital, and ecosystem coordination in AI cloud infrastructure, while maintaining the target price based on DCF valuation.

Methodology notes

• Valuation methodsDCF

  Discounted cash flow valuation

  Bernstein assigns Naver a target price of KRW 330,000 using the DCF method, implying a forward one-year PER of about 20x, and discloses assumptions including 12% WACC, 2% terminal growth rate, 3.6% risk-free rate, 17% market risk premium, and 0.5 beta.

• Strategic analysisneocloud partnership model

  Partnership-driven AI cloud infrastructure model

  The report positions Naver AI Factory as a structure jointly driven by the platform company, chip suppliers, infrastructure capital, and AI ecosystem demand, rather than a model in which Naver alone bears all capital expenditure.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Naver Corporation (035420.KS)

  Core covered name; NVIDIA plans to take a stake and support the AI Factory ecosystem

  Strengths

  Receives strategic endorsement from a global chip supplier, which is beneficial for hardware procurement, ecosystem cooperation, external capital financing, and the rollout of AI cloud infrastructure.

  Weaknesses

  AI Factory is still in the stage of large-scale capex and execution validation, while traditional search user engagement and e-commerce growth remain under pressure.

  Comparison

  Compared with a simple customer relationship for chip procurement, Naver's relationship with NVIDIA is upgraded to a triple alignment of supplier, partner, and shareholder.

  Risks

  Insufficient utilization of AI data centers, financing execution falling short of expectations, weak growth in traditional businesses, or regulatory approval obstacles.

• NVIDIA

  Plans to become an approximately 5% strategic shareholder of Naver and an AI infrastructure supply partner

  Strengths

  Strengthens long-term cooperation with Naver AI Factory through equity participation, and may help promote the AI cloud infrastructure ecosystem in Korea and the United States.

  Weaknesses

  The report does not assess NVIDIA's own financial impact in detail.

  Comparison

  Its role expands from supplier to ecosystem co-builder and shareholder.

  Risks

  There is still uncertainty regarding the final completion ratio of the transaction and the effectiveness of subsequent ecosystem synergies.

• Brookfield Corp

  Potential AI cloud infrastructure investment partner

  Strengths

  Can provide capital and infrastructure investment capabilities for gigawatt-scale, multi-tenant AI cloud infrastructure.

  Weaknesses

  The report does not provide specific investment terms.

  Comparison

  Within Naver's neocloud structure, it plays more of a capital and infrastructure role, while NVIDIA is more focused on compute supply and ecosystem endorsement.

  Risks

  Large infrastructure projects carry execution risks in financing, construction, and demand realization.

Key data

• NVIDIA subscription amountAbout KRW 1.5 trillion / about USD 1 billionCompleted through a third-party share issuance.
• Number of shares issued7.2 million common sharesThe issue price is KRW 204,500 per share.
• Estimated NVIDIA ownership stakeAbout 5%The final percentage may vary slightly depending on the number of shares outstanding as of the payment date.
• Target price330,000 KRWBased on the DCF valuation method.
• Closing price209,500 KRWAs of July 24, 2026.
• Potential upside58%Based on the target price and closing price.
• Adjusted EPSF25A 13,065; F26E 14,068; F27E 15,783 KRWFrom the report table.
• Valuation multiplesAdjusted P/E: F25A 16.0x, F26E 14.9x, F27E 13.3xEV/EBIT are 13.7x, 13.5x, and 11.6x, respectively; EV/Sales are 2.5x, 2.2x, and 1.9x, respectively.

Impact & implications

If the transaction is completed smoothly, the funding and ecosystem narrative of Naver AI Factory will become more credible. As a strategic shareholder, NVIDIA could strengthen chip supply assurance, infrastructure deployment support, and partner attraction, while reducing investor concerns about large-scale AI data center capex, SPV financing, and demand visibility. From an investment perspective, the report believes this event reinforces the logic behind the Outperform rating.

Risks

• E-commerce GMV growth is weaker than expected.
• User engagement in traditional search declines faster than expected.
• The government does not approve the share swap transaction with Dunamu.
• Insufficient AI data center utilization.
• Large-scale external financing or SPV financing required for AI Factory progresses more slowly than expected.

What to watch

• The final completion timing of NVIDIA's share subscription, final ownership stake, and any adjustment to the share count before the payment date.
• Follow-up implementation progress by Naver, NVIDIA, and Brookfield on gigawatt-scale multi-tenant AI cloud infrastructure projects in Korea and the United States.
• Customer demand visibility for AI Factory, the pace of compute procurement, and data center utilization.
• Whether future SPV financing and external capital introduction proceed more smoothly.
• Progress in Naver's core e-commerce GMV, traditional search user engagement, and regulatory approvals.