LG, Naver Shares Plunge Despite Nvidia AI Partnership Announcements

LG Electronics and Naver experienced significant stock price drops of over 7% on June 9, even as the South Korean KOSPI index surged more than 8% to reclaim the 8,000-point mark. This sharp decline for the two tech giants occurred despite recent announcements of collaborations in the artificial intelligence (AI) sector with Nvidia.

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LG Electronics and Naver fell more than 7% even on a day when the KOSPI index rose more than 8% to retake 8,000 points.

The primary reason cited for the steep fall is profit-taking by investors. Both LG Electronics and Naver had seen substantial price increases in the preceding days, fueled by news of their partnerships with Nvidia. LG Electronics, in particular, had reached a historic high of 392,500 won on June 2, following Nvidia CEO Jensen Huang's visit to South Korea. However, since June 4, the stock has been on a downward trajectory, with four consecutive days of sharp declines as investors cashed in on their earlier gains.

Despite efforts to bolster confidence, including a meeting between LG Group Chairman Koo Kwang-mo and Nvidia CEO Jensen Huang to discuss collaborations in areas like physical AI and mobility, the downward trend persisted. The article suggests that these high-level discussions were insufficient to counteract the market's reaction to the rapid price appreciation.

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Both companies announced collaborations with Nvidia in the artificial intelligence (AI) field, but their stock prices fell due to profit-taking after recent surges.

Data indicates that foreign and institutional investors were net sellers during this period, offloading significant amounts of stock. Conversely, individual investors were net buyers. The article implies that the market's focus shifted from future AI potential to immediate profit realization, leading to the sell-off in LG Electronics and Naver shares.

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LG Group Chairman Koo Kwang-mo met directly with CEO Huang and announced plans for cooperation in physical AI and mobility, but it was not enough to reverse the downward trend.