[This Week's Focus Stocks] Hyundai Motor at a Crossroads: Apple or Foxconn?

Corporate Value at a Historical Low... SW and AI Capabilities Are Key
Governance Restructuring Marks First Step Toward Groupwide SW Integration
'Robotics' Emerging as a New Growth Engine

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Despite Hyundai Motor Company expanding its market presence faster than any other global automaker, there are concerns that its valuation remains at a historical low. This is attributed to a perceived lack of competitiveness in artificial intelligence (AI) and software (SW) capabilities in the era of autonomous driving. Analysts suggest that Hyundai’s ability to secure future autonomous driving capabilities will determine whether it becomes a leader in the ecosystem or remains a mere production base.

According to the Korea Exchange, Hyundai Motor Company’s stock price has risen by about 16% so far this month. This increase is believed to reflect expectations for improved performance following the resolution of tariff uncertainties in the United States. Nevertheless, Hyundai’s price-to-earnings ratio (PER) is still around 7 times. At the end of last year, it was only 4.37 times. This is just over half of the 12 times average PER recorded between 2012 and 2022. The PER, which is calculated by dividing market capitalization by net profit, is considered high when a stock is overvalued.

Hyundai Motor Company’s performance continues to soar. Its sales increased from 142.1515 trillion won in 2022 to 175.2312 trillion won last year. This year, sales are expected to approach 190 trillion won. Operating profit also grew from 9.8249 trillion won in 2022 to 14.2396 trillion won last year. Although this year’s figure is expected to decrease to 12.6172 trillion won due to a 15% tariff imposed by the U.S. government, the company is still maintaining a stable profit in the 10 trillion won range. Having risen to become the world’s third-largest automotive group, Hyundai has grown into a major player in the industry.

However, the stock price remains undervalued. According to FnGuide, as of December 8, the average target price set by securities firms is only 340,962 won. While some firms have suggested 450,000 won or 430,000 won, the upside is still seen as only about 8.1% above the closing price of 315,500 won on December 8.

Reasons for Hesitation Despite Low Price: SW and AI Capabilities

There are several reasons why the market remains hesitant about Hyundai Motor Company, despite its low price. Above all, competition in the automotive industry has intensified in recent years, and concerns persist about the growth limitations of traditional automakers during this paradigm shift toward electric vehicles, battery innovation, software, and autonomous driving.

Choi Taeyong, a researcher at DS Securities, pointed out, "The main reason for the historically low valuation is the lack of AI and SW capabilities, as represented by autonomous driving," adding, "A structural cause is that AI and SW development capabilities within the group are dispersed among Hyundai Mobis, Hyundai AutoEver, 42dot, and Boston Dynamics."

The recent resignation of Song Changhyun, former president who led Hyundai’s future mobility development, is seen as a clear negative signal. Regardless of individual capabilities, Mr. Song was a symbolic figure in Hyundai’s future mobility strategy. Even before Chung Euisun, Chairman of Hyundai Motor Group, acquired 42dot, he established the 'TaaS' division to oversee group-wide mobility functions and appointed Mr. Song to lead it. It was unprecedented for an outsider to be given the title of president at Hyundai. By focusing the group’s resources on 42dot, the plan was to spearhead core autonomous driving policies. However, with Mr. Song’s departure without notable achievements, Hyundai’s future mobility strategy has lost its structural focal point.

Expectations for Groupwide SW Integration Through Governance Reform

Jensen Huang, CEO of Nvidia, greeted the audience alongside Chung Euisun, Chairman of Hyundai Motor Group, at the 'GeForce Gamer Festival' held on the night of October 30, 2025, at COEX Plaza in Gangnam-gu, Seoul, celebrating the 25th anniversary of GeForce Korea. Photo by Yongjun Cho

Hyundai Motor Company appears to have decided to focus on collaboration with Nvidia rather than pursuing independent technological challenges. Kim Junseong, a researcher at Meritz Securities, commented, "Samsung Electronics achieved higher global market share by launching the Galaxy series based on Google’s Android OS, after the failure of Omnia and the historic success of the iPhone," adding, "If Hyundai Motor Group formalizes its cooperation with Nvidia and accelerates the launch of future vehicles such as smart cars, it will be a key event for the group’s stock price."

Governance reform could become a major turning point at this stage. Hyundai Motor Group’s circular shareholding structure is 'Hyundai Mobis → Hyundai Motor Company → Kia → Hyundai Mobis.' If long-standing issues of management succession and governance improvement are resolved, it is expected that the surviving entity of Hyundai Mobis will serve as the technological hub. There are also expectations for integration of AI and SW capabilities within the group.

Researcher Choi said, "As a de facto holding company, technological integration would be considered an internal business reorganization, and Hyundai Mobis could be re-evaluated as the group’s SW platform company," adding, "These achievements are expected to become visible through the supply contract for Nvidia GPUs, the unveiling of a software-defined vehicle (SDV) pace car next year, and mass production of humanoids."

Mid- to Long-Term Uptrend Expected If 'Robot' Orders Are Secured

Boston Dynamics Atlas 2. Hyundai Motor Company

The success or failure of Hyundai Motor Company’s robotics business, its new growth engine, is crucial. Analysts believe that adding the value of robotics to automobiles could help Hyundai escape its undervaluation. This month, Hyundai Motor Group will unveil the mass-production model of MobED for the first time in the world at Japan’s 'International Robot Exhibition 2025 (iREX)' and plans to begin sales in the first half of next year. At CES 2026, the world’s largest electronics and IT exhibition to be held in January next year, Hyundai will unveil its third-generation humanoid robots and begin demonstration tests. In the second half of the year, it also plans to announce devices related to SDVs for autonomous driving.

It is believed that adding the value of robotics to the automotive industry could enhance its growth potential. Additionally, Hyundai could be classified as a beneficiary of U.S. national security policies. U.S. President Donald Trump has suggested that he will announce policies to support AI and foster the robotics industry, aiming to promote reshoring and reduce dependence on China. The fostering of the robotics industry is also likely to exclude Chinese companies from the value chain. As a result, Hyundai Motor Group’s U.S.-based robotics subsidiary, Boston Dynamics, is expected to benefit from these developments.

Kim Guyoun, a researcher at Daishin Securities, explained, "If these narratives are confirmed with orders and sales, the company’s valuation will show a mid- to long-term uptrend," adding, "In particular, a re-evaluation of the sector is expected, centered around Boston Dynamics."