Artificial Intelligence
GMO Internet establishes AI division amid ongoing fair value debate
GMO Internet has set up a Group AI Acceleration Division following a July 14 board meeting, appointing Executive Vice President Hirofumi Yamashita to lead group-wide AI transformation efforts. The move comes as the stock has gained 27.93% over the past 30 days but remains down 39.45% year to date, with a three-year total shareholder return of 40.14% contrasting with a 72.07% decline over the past 12 months. The company trades at a price-to-earnings ratio of 29 times, above the JP Media industry average of 13.7 times and a peer average of 20 times, while a Simply Wall St discounted cash flow model estimates a fair value of ¥1,054.86 per share, implying a 46.2% discount to intrinsic value. Analysts caution that AI investments could pressure margins and that weaker contributions from internet advertisement and media segments pose risks.