Quick overview

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The SoftBank Group Corp. sold all of its shares in Nvidia, earning $5.8 billion before founder Masayoshi Son made a flurry of planned investments to expand his own influence and support artificial intelligence. By the end of March, the Tokyo-based company had increased its stake in Nvidia to roughly $3 billion.

SoftBank reported a surprising net income of ¥2.5 trillion ($16.2 billion) in its fiscal second quarter, significantly surpassing the average analyst estimate of ¥418.2 billion thanks to that stake and a windfall at its Vision Fund startup investment unit. Additionally, SoftBank announced on Tuesday that a 4-for-1 stock split will occur in January.

OpenAI and Oracle Corp., two of the most sought-after AI brands globally, are now part of Son’s company’s portfolio. These investments boosted SoftBank’s paper gains and contributed to its share price rising by 78% in the three months ending in September, the best performance since the December quarter of 2005. Citi analyst Keiichi Yoneshima stated that SoftBank is successfully recovering its investments from a growing number of bets, “so we raise our forecasts.”

Linking his calculations with OpenAI’s valuation and assuming a future valuation range of $500 billion to $1 trillion for the ChatGPT operator, the analyst set his target price for SoftBank’s stock at ¥27,100. Even as he reduces other investments, Son, 68, is actively seeking to profit from the booming sectors of chips and AI. Initiatives like the Stargate data center rollout and a proposed $30 billion investment in OpenAI are driven by the SoftBank founder’s ambitions.

Taiwan Semiconductor Manufacturing Co. is another company Son is pursuing, along with others, in participating in an Arizona AI manufacturing hub worth $1 trillion. SoftBank even considered acquiring Marvell Technology Inc., a US chip manufacturer, earlier this year. Balancing funding for these new investments will be challenging.