Naver Shares Sink Nearly 6% Despite $10 Billion Nvidia and Brookfield AI Deal Amid Dilution Fears

Shares of Naver Corp. fell nearly 6% in Seoul trading Friday, even as the South Korean internet giant unveiled a landmark $10 billion investment package with Nvidia Corp. and Brookfield Corp. to dramatically expand its artificial intelligence data center infrastructure — a reaction that underscored growing investor anxiety over how the company plans to finance its ambitious AI buildout.

Naver stock closed at 207,500 won, down 12,500 won, or 5.68%, on the Korea Exchange. The decline came on the same day the company formally announced the financing agreement with Nvidia and Brookfield in San Francisco, a deal that would more than triple the size of an AI data center under construction at Naver’s GAK Sejong hyperscale facility, expanding it from 55 megawatts to 200 megawatts of capacity by 2028.

A deal investors met with skepticism rather than enthusiasm

Under the terms of the agreement, Brookfield agreed to a nonbinding term sheet to provide up to $9 billion as the project’s exclusive capital partner, while Nvidia committed to investing $1 billion directly into Naver, with Naver responsible for funding the remainder of the roughly $10 billion project. Despite the scale of the commitment, market analysts pointed to the financing structure itself as a likely source of investor unease. Raising several billion dollars in external financing typically requires either significant new debt or equity dilution, a dynamic that can weigh on existing shareholders even when the underlying investment is viewed as strategically sound.

Naver’s stock had already been trading well below its 52-week high of 304,000 won heading into Friday’s session, and the latest decline pushed shares closer to the lower end of their 52-week range of 181,100 won to 304,000 won. The stock had fallen more than 8% over the trailing 12 months even before Friday’s drop, reflecting a broader period of pressure on the company’s valuation.

Broader tech selloff added to the pressure

Naver’s decline also came amid a rougher session for technology stocks across Asia and the United States. SK Hynix, one of South Korea’s largest chipmakers and a key Nvidia memory supplier, fell 3.5% in Seoul trading the same day, following a Bloomberg report that the company had fully exhausted its cap on converting locally held shares into U.S.-listed depositary receipts. In the U.S., the tech-heavy Nasdaq Composite dropped 0.64% Friday as chip stocks broadly weighed on the index, even as the S&P 500 closed nearly flat and the Dow Jones Industrial Average gained on strength in Apple shares. Nvidia’s own stock has faced volatility in recent sessions as well, with some reports noting the chipmaker’s shares have declined even following positive AI infrastructure announcements, as investors increasingly focus on evidence of returns from major AI spending commitments rather than the announcements themselves.

Naver’s chairman frames the deal as transformative

Despite the market’s muted reaction, Naver’s leadership struck a notably optimistic tone about the partnership. Speaking at the AI summit in San Francisco where the deal was announced, Naver founder and chairman Lee Hae-jin described the scale of the investment in stark terms. “This time, Nvidia and Brookfield have invested a large sum of $10 billion in us,” Lee said, characterizing the deal as an opportunity for the company to make a significant leap forward. He added that the partnership would help Naver scale up its data center operations more quickly by leveraging the global reach and expertise of both Nvidia and Brookfield, beyond simply providing capital.

According to reporting from Seoul Economic Daily, Lee and Naver Chief Executive Choi Soo-yeon traveled to Brookfield’s headquarters in Toronto earlier in the week to finalize details of the AI infrastructure investment and financing arrangement ahead of Friday’s announcement.

Execution risk remains front and center

Analysts tracking the deal have flagged several risks that could explain investor caution, even setting aside financing concerns. Brookfield’s $9 billion commitment remains structured as a nonbinding term sheet rather than a finalized agreement, and Nvidia’s own $1 billion investment is subject to standard closing conditions, including Naver successfully finalizing the remaining financing separate from Nvidia’s contribution. The expanded facility also needs to become operational on a relatively tight timeline, with the 200-megawatt buildout targeted for completion by 2028 in a global AI infrastructure market that continues to shift rapidly as demand patterns evolve.

Some analysts have also pointed to Naver’s broader strategic positioning as an added source of complexity. The company has separately been pursuing a roughly $10.3 billion acquisition of a cryptocurrency exchange, a move that would fold a fast-growing but heavily regulated business into a traditional internet and technology conglomerate at the same time it is undertaking its largest AI infrastructure commitment to date.

Long-term outlook remains more optimistic than the stock reaction suggests

Even with Friday’s decline, most analysts covering Naver maintain a bullish long-term outlook on the stock. Coverage from multiple research firms shows an overwhelming majority of analysts rating the stock a “buy,” with average 12-month price targets well above current trading levels — in some cases suggesting upside of more than 50% from Friday’s closing price. That gap between near-term market sentiment and longer-term analyst expectations suggests investors may be drawing a distinction between the strategic merits of the Nvidia and Brookfield partnership and the near-term financial mechanics of how Naver intends to pay for its share of the project.

With the deal still pending finalized financing terms and regulatory and closing conditions still to be worked through, Naver’s next scheduled earnings report, expected in early August, is likely to draw close attention from investors looking for more clarity on how the company plans to fund its portion of the AI infrastructure buildout. Until those details become clearer, Friday’s stock reaction suggests the market remains more focused on the financing risk embedded in the deal than on the long-term strategic upside Naver’s leadership has emphasized publicly.