SoftBank shares surge 13% as $30B OpenAI bet drives $2.87B profit

SoftBank Group shares surged to a record high on Friday, jumping more than 13% to 14,205 yen before closing up 10.39% at 13,865 yen. The rally followed the Japanese technology investor’s first-quarter earnings that beat analyst expectations, delivering a net profit of 421.8 billion yen ($2.87 billion) compared to a loss in the same period last year.

Why this matters: SoftBank’s massive AI investments are driving both its financial performance and investor confidence.

• The company has committed $30 billion to ChatGPT maker OpenAI this year and is leading financing for Stargate, a $500 billion U.S. data center project.
• Market enthusiasm for AI-related companies boosted valuations across SoftBank’s portfolio of listed and unlisted technology companies.
• The company’s loan-to-value ratio improved to 17% at the end of June, down from 18% at the end of March.

The big picture: SoftBank’s stock surge contributed significantly to Japan’s broader market gains, with the company becoming the biggest contributor to the Topix index’s 1.21% rise to close at 3,024 points.

• The Topix index traded above the 3,000-point mark for the first time in its history during Friday’s session.
• SoftBank’s strong performance provided relief to investors who have watched the stock trade at more than a 50% discount to its asset value over the past five quarters.

What analysts are saying: Market experts view the results as validation of SoftBank’s diversified AI strategy.

• “Evidence of SoftBank’s quality diversified portfolio, strong underlying fundamentals, thematic/secular tailwinds for its equity holdings, and the resilience of its balance sheet,” wrote Paul Golding, a Macquarie analyst.
• “Active investors scooped up SoftBank Group shares to beat the Topix’s gain,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute. “When the main indexes rise, they need to buy heavyweights that are rising. SoftBank’s strong earnings and the Topix’s gains came at the same time.”