Shares in SoftBank Group experienced significant volatility following the announcement that the company had sold its entire stake in chipmaker Nvidia for $5.8 billion. This strategic divestment was part of a larger initiative to fund extensive investments in artificial intelligence (AI), particularly in OpenAI, the developer of the popular ChatGPT.
Initially, SoftBank’s stock plunged by as much as 10 percent in the morning trading session. However, by the end of the day, the stock partially recovered, closing down 3.5 percent. Despite this dip, it remains up close to 140 percent for the year, indicating robust performance in the broader market context.
The move to exit a relatively stable investment like Nvidia has raised concerns among analysts and investors. Richard Windsor, a tech analyst at Radio Free Mobile, expressed skepticism about SoftBank’s strategy. He noted that this exit from Nvidia represents a significant risk, as it places a heavier emphasis on AI investments, which carry an unpredictable trajectory.
In the wake of the announcement, some retail investors reportedly reacted with alarm, leading to increased selling activity. However, another analyst in Tokyo urged attention to SoftBank’s recently reported quarterly net profit of $16.2 billion, largely bolstered by its tech-heavy Vision Funds, which posted an impressive investment gain of ¥2.8 trillion ($18 billion), driven primarily by holdings in OpenAI.
While the financial results appear strong, Windsor pointed out that a substantial portion of the profit derived from unrealized gains, which historically can fluctuate dramatically. This aspect raises questions about the sustainability of SoftBank’s current financial health.
SoftBank’s Chief Financial Officer, Yoshimitsu Goto, emphasized the company’s need to divest from existing portfolios to facilitate over $30 billion in anticipated investments in OpenAI. The bold move reflects Masayoshi Son’s deep commitment to AI technologies and his vision of positioning SoftBank as a leader in this rapidly evolving sector.
