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June 22, 2026
💼 LG CNS Boards the Flight to NVIDIA HQ: A Turning Point for Fundamentals? - 2026.06.22
Hello, fans. This is Taengkung from Bultagi.com.
The market has been heating up recently with AI and robotics themes. But even in a bullish atmosphere, a cool-headed valuation check is essential. Today, I will calmly examine LG CNS's visit to NVIDIA headquarters and its expansion into public and SME AX (AI Transformation) from a fundamental perspective.
💼 LG CNS Boards the Flight to NVIDIA HQ, a Turning Point for Fundamentals?
On the 22nd local time, CEO Hyun Shin-gyun and about 30 core executives of LG CNS and the group visited NVIDIA headquarters in Santa Clara, California [1]. This is a follow-up working-level discussion that took place just two weeks after the meeting between Chairman Koo Kwang-mo and CEO Jensen Huang on the 8th [2].
The core agenda of this visit is the establishment of a physical AI, robotics, and AI data center ecosystem [3]. In particular, LG CNS is drawing a blueprint to expand its existing design, build, and operate (DBO) data center business into AI GPU infrastructure, immersion cooling, and modular data centers [2]. In addition, it aims to expand its scope to smart factories and logistics automation businesses by combining NVIDIA's robotics technology with its industrial robot platform [4].
The market is cheering this momentum and trying to justify high multiples. But from a conservative perspective, we need to pause and think. Can cooperation with global big tech lead to immediate EPS growth. Building physical AI and robotics platforms entails massive initial R&D costs and infrastructure investments. There is a risk that it will take a considerable amount of time for the EV/EBITDA 15x level expectations currently assigned by the market to be proven by actual free cash flow generation.
📉 Public and SME AX Expansion, is Profitability Verification Possible?
Top-line expansion is underway across the board, regardless of public or private sectors. LG CNS plans to participate in the '2026 Public AI Expo' starting on the 23rd to showcase the latest public AX technologies, such as administrative task automation [5]. It also signed a business agreement with the Korea Federation of SMEs to support a 4.2 billion won large and small business mutually beneficial AX leading model project over the next two years [6]. Internally, it is accelerating the introduction of generative AI by applying Anthropic's 'Claude' to its business systems [7].
The visibility of top-line growth seems clear. However, traditional system integration and public informatization businesses structurally have low margins. The AX support business for SMEs may also be a strategy aimed at a long-term lock-in effect, but it may have to endure short-term profitability damage. We must be wary of the possibility that the company-wide operating profit margin will be diluted if low-margin public projects and new AI businesses requiring large-scale investments are mixed into the existing business structure that maintained a stable profit stamina of around PER 12x.
⚠️ Caution Against Profit-Taking Due to Short-Term Surge is Needed
Today (22nd), LG CNS closed at 89,600 won, up 4.43% from the previous trading day. The trading volume was 2,297,765 shares, a significant increase from the previous trading day, representing the market's interest.
However, looking at the other side of supply and demand, the situation is quite different. Amid the flashy bullish atmosphere, foreigners net sold a whopping 44.86 billion won, and institutions also recorded a net sell of 8.79 billion won, pouring out massive selling volume. While retail investors buy following the momentum, smart money is showing a typical distribution pattern of thoroughly realizing profits and exiting from a short-to-mid term swing perspective.
Taengkung views that the current NVIDIA partnership momentum may be a value trap that has been excessively priced in ahead of actual fundamental improvements. The more dominant the rosy outlook is, the more careful approach is required, thoroughly checking the bearish scenario suggested by the massive selling by foreigners and institutions and classifying it as a candidate for a profit-taking trim.
📰 Reference News (7)
LG and NVIDIA Kick Off Follow-Up Working-Level Discussions... 30-Member Working Group Visits US HQ - Newsis
뉴시스 · 2026.06.22
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LG Accelerates AI Cooperation with NVIDIA... Over 30 Executives and Staff Visit the US
네이버뉴스 · 2026.06.21
📰 View original
LG Executives Visit NVIDIA to Discuss Next-Gen AI Cooperation
네이버뉴스 · 2026.06.21
📰 View original
LG Partners with NVIDIA... Accelerates Securing Talent for Physical AI Commercialization
네이버뉴스 · 2026.06.22
📰 View original
MOIS·NIA,
네이버뉴스 · 2026.06.22
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Accelerating AI Talent Fostering... KOSME Selects 13 Industry-Specific AI Contract Departments
네이버뉴스 · 2026.06.22
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OpenAI Grabs 'Samsung', Anthropic Lands in 'Seoul'... Korea Becomes Enterprise AI Battleground
네이버뉴스 · 2026.06.22
📰 View original
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