Share price volatility widened following earnings announcements from AI-related companies and hyperscalers, in a development that overturned the previous pattern of small- and mid-cap stocks outperforming. NHN posted record-high earnings, driven by demand for AI infrastructure, and its share price surged.
An analysis of the second-quarter earnings season found that the share price volatility of AI-related companies and hyperscalers exceeded that of small- and mid-cap stocks, with share price swings widening after earnings announcements. The established pattern has been for large-cap stocks to lead at the start of the season, followed by small- and mid-cap stocks later on, but some analysts said this trend reversed in the current quarter.
NHN reported consolidated second-quarter revenue of KRW 757.9 billion and operating profit of KRW 57.9 billion, with both revenue and operating profit reaching record quarterly highs. The share price rose approximately 29.8% from the previous business day on the earnings announcement date, then rose a further 12.2% the following day and remained near its high.
The main drivers of performance were the AI and cloud businesses. As the supply of GPU services gained momentum, GPU-related revenue increased 52.9% year on year to KRW 159.8 billion. NHN Cloud revenue grew 85.3% year on year, while cloud revenue exceeded KRW 100 billion following the start of operations at the Yangpyeong data center.
The gaming and payments divisions also grew. Gaming revenue increased 21.5% year on year, supported by web board games and mobile games in Japan, while payments revenue rose 27.3% on the inflow of new merchants. The securities industry viewed NHN's business improvements positively and raised its price targets.