Is the Adjustment Over... Kakao and Naver Rebound

Untact Leading Stocks Kakao and Naver Turn Up in Ten Days
Strong Earnings Outlook for US Tech Leaders Amazon and MS Influence
"Growth Expected to Continue Even After COVID-19 Ends"

[Asia Economy Reporter Minwoo Lee] After about ten days of decline, the stocks of leading untact (contactless) companies such as Kakao and NAVER have started to rebound. The turnaround in the U.S. stock market, where technology-driven leaders like Microsoft (MS) and Amazon, which had been somewhat sluggish, rose on strong earnings forecasts, is interpreted as reigniting expectations for untact stocks in South Korea.

According to the Korea Exchange as of 9:06 a.m. on the 21st, Kakao's stock price rose 5% from the previous day to 325,500 KRW. The stock, which had been in a correction phase, reversed to an upward trend after about ten days. Previously, Kakao's stock hit a record high of 368,000 KRW on the 10th but fell 14.5% to 315,000 KRW by the previous day. NAVER's stock showed a similar trend, rising 3.99% to 273,500 KRW at the same time. After hitting a record high of 308,000 KRW alongside Kakao on the 10th, it had dropped 15% by the previous day but rebounded on this day.

This appears to be due to renewed growth expectations for leading untact stocks. Recently, as news of progress in the development of the COVID-19 vaccine by U.S. pharmaceutical company Moderna was reported, investor sentiment shifted from untact stocks to traditional value stocks. However, with strong earnings forecasts for U.S. technology leaders such as Microsoft (MS) and Amazon, domestic untact stocks have been reappraised.

On the previous day (local time) in the U.S. Nasdaq market, Amazon closed at $3,196.84, up 7.93% from the previous session. This marked a swift recovery from the continuous decline since the 10th. This was influenced by Goldman Sachs raising Amazon's target price to $3,800 per share, based on the judgment that Amazon would particularly benefit from the acceleration of online shopping and cloud adoption due to COVID-19. MS also closed at $211.60, up 4.3% from the previous day, amid positive outlooks for its fiscal fourth-quarter earnings scheduled for the 22nd (local time).

As the untact culture settles and digital transformation accelerates due to COVID-19, growth stocks like Kakao and NAVER are expected to trend upward in the long term. Hwang Seong-jin, a researcher at Hyundai Motor Securities, said, "The internet industry is the sector that benefits the most from untact and digitalization triggered by COVID-19," adding, "Changed consumption and payment patterns will continue even after the end of COVID-19." Han Dae-hoon, a researcher at SK Securities, explained, "Considering earnings and future growth potential, existing leading stocks could gain more strength," and emphasized, "The earnings announcements of major U.S. tech companies such as MS, Tesla, and Amazon on the 22nd and 23rd will be important."

This content was produced with the assistance of AI translation services.