SoftBank Swings To Profit On Vision Fund Gains Ahead Of AI Push
A recovery at SoftBank’s struggling Vision Fund is helping Son double down on bets geared to help him capitalize on booming investment in AI hardware.
(image source: Bloomberg)
SoftBank Group Corp. swung to a bigger-than-expected profit in the June quarter, riding on gains from its bets on Nvidia Corp. and startups in a boost for founder Masayoshi Son’s bets on artificial intelligence technologies.
The Tokyo-based company reported net income of ¥421.82 billion $2.9 billion in its fiscal first quarter, more than double the average of analyst estimates. Its signature Vision Fund logged a ¥451.39 billion profit, helped by a recovery in tech valuations and gains on holdings such as Coupang Inc., Auto1 Group SE, Symbotic Inc. and Swiggy Ltd.
A recovery at SoftBank’s struggling Vision Fund is helping Son double down on bets geared to help him capitalize on booming investment in AI hardware. SoftBank was also helped by its stakes in Nvidia and Taiwan Semiconductor Manufacturing Co., while it continues to sell off less relevant assets.
“Our longer-term outlook for SoftBank Group is cautiously optimistic, with a consensus toward continued business expansion,”
(image source: Bloomberg)
SoftBank increased its stake in Nvidia to more than $3 billion as of end-March, helping the Japanese investor benefit from the AI accelerator maker’s 46% rally during the three months through June. US President Donald Trump’s threat to unleash 100% chip tariffs but exempt companies moving production to America is infusing optimism for SoftBank’s $500 billion Stargate data center foray with OpenAI and Oracle. That nudged the Japanese company’s stock up to a fresh record high.
“Our longer-term outlook for SoftBank Group is cautiously optimistic, with a consensus toward continued business expansion,” said Ashwin Binwani, founder of Alpha Binwani Capital. “We are prepared for volatility and see it as a buy-the-dip opportunity.”
The 67-year-old SoftBank founder seeks to play a more central role in the spread of AI through sweeping partnerships such as Stargate and a planned $30 billion investment in OpenAI. Son is also courting TSMC and others about taking part in a $1 trillion AI manufacturing hub in Arizona.
But concern over whether SoftBank can manage multiple mass-scale funding needs as interest rates inch up is keeping its stock at a significant discount to the total net asset value of its holdings. Some of the conversations behind Stargate have slowed due to market volatility, uncertainty around US trade policy and questions around the financial valuations of AI hardware, Bloomberg News reported in May.
SoftBank’s plan to buy chip designer Ampere Computing Holdings in a $6.5 billion deal remains subject to approval by US antitrust regulators and the Committee on Foreign Investment in the US, it said. That deal is facing a potentially lengthy probe, Bloomberg reported.
The company has been selling off assets to gear up for such deals. In June, it raised around $4.8 billion through a sale of T-Mobile US Inc. shares.
“Key points to consider in assessing SoftBank include whether investment in the Stargate Project involving AI infrastructure in the US will progress; whether additional investment in OpenAI amid a fluid management situation is tenable,” SMBC Nikko Securities analyst Satoru Kikuchi wrote in a note earlier this year.
