SoftBank Group has bounced back with force. On Friday, its shares soared over 13%, a record intraday high, after the company reported a sharp first-quarter profit that beat expectations and reignited investor faith in its aggressive drive into artificial intelligence.
The Japanese tech conglomerate posted a ¥421.8 billion ($2.87 billion) net profit for Q1 2025, marking its second consecutive profitable quarter and a complete turnaround from the ¥174 billion loss in the same period last year.
This resurgence, led by a $4.8 billion rise in Vision Fund asset value, comes as SoftBank steps up its investment in AI with massive bets across sectors and continents.
Much of this is pinned to SoftBank’s portfolio moves, currently leading a $40 billion investment round for OpenAI, with ¥22.5 billion of that coming from its own balance sheet.
It’s also behind the $500 billion Stargate infrastructure initiative in the United States, an AI-focused data centre project involving Oracle, OpenAI, and Abu Dhabi’s MGX.
But while the vision is commendable, execution is proving to be more complicated.
The Stargate project, despite its headline-grabbing scale, has yet to break ground. CFO Yoshimitsu Goto conceded that the initiative is “bogging down” due to friction among partners and unresolved site selection issues.
Discussions are now underway to scale down the scope, with a more modest data centre in Ohio being considered for launch before the year ends.
In the meantime, SoftBank has strengthened its positioning in AI hardware. The firm has recently upped its stake in Nvidia to over $3 billion, benefitting from the chipmaker’s 46% rally in Q2.
The increased exposure to high-performing public tech firms such as Coupang, Grab, Symbotic, and Swiggy has also helped lift the valuation of Vision Fund assets.
SoftBank’s share price ended Friday at 13,865 yen, up 10.39% after hitting a peak of ¥14,205 in early trading. That rise made it the single largest contributor to gains on Japan’s Topix index, which crossed the 3,000-point milestone for the first time ever and closed at 3,024.
For investors, this sudden rally has brought rare relief. For over a year, SoftBank stock has traded at a stubborn 50% discount to the value of its underlying assets. Now, its loan-to-value ratio has dropped to 17% from 18% in March, signalling an improvement in financial stability.
Paul Golding, an analyst at Macquarie, remarked, “The results were evidence of SoftBank’s quality diversified portfolio, strong underlying fundamentals, thematic/secular tailwinds for its equity holdings, and the resilience of its balance sheet.”
Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute, said momentum played a role in Friday’s share spike. “Active investors scooped up SoftBank Group shares to beat the Topix’s gain. 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.”
Yet even with the positive numbers, questions remain. SoftBank’s recent history of erratic investment outcomes and failed tech bets, most notably WeWork, still looms large. Whether this renewed AI strategy can avoid past pitfalls is something only time and execution will reveal.
