SoftBank Group Corp. shares reached a record high, surging almost 14%, following the company's return to quarterly profit. This turnaround is largely attributed to a recovery in its flagship Vision Fund and strategic investments in artificial intelligence (AI) companies, most notably Nvidia Corp. The stock's performance this year has added nearly $37 billion to its market capitalization, with an overall gain of over 36%.
SoftBank reported a fiscal first-quarter profit of 421.8 billion yen ($2.87 billion), significantly surpassing LSEG consensus estimates of 127.6 billion yen. This marks the second consecutive quarter of profit for SoftBank, a substantial improvement from the 174.28 billion yen loss recorded in the same period last year. The Vision Fund segment, which includes other factors like expenses, achieved a profit of 451.4 billion yen, marking its largest gain in value, at $4.8 billion, since the June quarter of 2021. This gain was bolstered by increased valuations in public companies like ride-hailing firm Grab and Indian food delivery firm Swiggy, alongside positive performance from some private Indian investments.
Despite the overall positive financial results, there were some offsetting factors. SoftBank recorded a 256.55 billion yen investment loss from other holdings in the June quarter, primarily due to the sale of T-Mobile and Alibaba shares, although this was partially mitigated by a gain from Nvidia shares. Additionally, Arm, SoftBank's majority-owned chip design subsidiary, contributed an 8.66 billion yen loss, which SoftBank attributed to increased research and development expenses outpacing revenue growth. Separately, SoftBank sold 13 million shares of T-Mobile in August for $3 billion. The company is also actively involved in AI-related spending, leading a $40 billion funding round for OpenAI (with an initial $10 billion already invested) and awaiting the closure of its proposed $6.5 billion acquisition of AI chip firm Ampere Computing.
