Nvidia CEO Jensen Huang, during his recent visit to South Korea, meets with SK Group Chairman Chey Tae-won, LG Group Chairman Koo Kwang-mo and Naver Chairman Lee Hae-jin. [Yonhap]
Nvidia CEO Jensen Huang, during his recent visit to South Korea, meets with SK Group Chairman Chey Tae-won, LG Group Chairman Koo Kwang-mo and Naver Chairman Lee Hae-jin. [Yonhap]

"I sold Samsung Electronics and SK Hynix to buy LG — what do I do now?" (LG investor)

"I trusted the Jensen Huang effect and bought LG." (investor)

LG Group shares, which had surged on hopes of ending their long-standing undervaluation, have lost more than half their value in under a month. The stocks soared to their daily upper limit on the Jensen Huang effect, only to collapse and give back nearly all of those gains. Investors who piled in when prices spiked are now nursing heavy losses.

LG CNS hit nearly 160,000 won ($103) after two consecutive days near the daily upper limit, then gave back all of those gains and plunged to 74,200 won as of Friday. LG Electronics climbed to 460,000 won on expectations of a partnership with Nvidia, then broke below the 200,000-won level and fell to 190,000 won as of Friday. LG Innotek, which soared to 1.8 million won, more than halved to around 870,000 won as of Friday.

LG affiliates' share prices soared after Nvidia CEO Jensen Huang visited South Korea and met with executives, fueling expectations of cooperation. LG Electronics surged on hopes of becoming a "physical AI infrastructure company," while LG CNS rallied on its potential as a "robot transformation platform."

The sudden price spike triggered a sharp rise in debt-fueled investing. Margin financing carries the risk of forced liquidation — when a stock falls far enough to push collateral ratios below a set threshold, brokerages automatically sell the pledged shares. Analysts say this mechanism amplified the subsequent plunge.

LG Group's Yeouido headquarters [Yonhap]
LG Group's Yeouido headquarters [Yonhap]

Even so, market optimism toward LG Group shares has not entirely faded. With the stocks having surrendered nearly all of their Jensen Huang-driven gains, expectations of a rebound are emerging on the view that the selloff has run its course.

Analysts have also argued that LG Electronics deserves to be revalued as a high-growth stock leading AI data center solutions and the robotics business, rather than being seen merely as a home-appliance maker. The calls came alongside an upbeat second-quarter earnings outlook, with several brokerages sharply raising their target prices.

Kyobo Securities published a company analysis report titled "Look at me! See how I've changed!" and raised its target price for LG Electronics by 94.4 percent, from 180,000 won to 350,000 won. "LG Electronics has long been perceived purely as a home-appliance company, but it now needs to be revalued as a growth stock expanding into AI data center cooling solutions — chillers — for North American big-tech clients and into the robotics business," said Choi Bo-young, an analyst at Kyobo Securities.

Hana Securities raised its target price for LG Electronics from 230,000 won to 260,000 won, citing expectations that second-quarter earnings will significantly beat market forecasts on US tariff refund effects and that new businesses will gain full momentum in the second half of the year. The brokerage said expectations for new ventures such as robotics would have a positive impact on the share price.


park@heraldcorp.com