SoftBank’s Vision Fund, the brainchild of company founder Masayoshi Son, has faced a number of headwinds, including a collapse in tech stocks due to rising interest rates, a Chinese market difficult and geopolitics.
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Actions of SoftBank The group rose 15.29% on Friday morning, a day after the Japanese investment company reported earnings that beat analysts’ expectations.
SoftBank published its first quarterly profit on Thursday after four quarters of losses, thanks to significant gains from its Vision Fund. For the December quarter, SoftBank’s net profit was 950 billion Japanese yen ($6.36 billion), significantly beating LSEG’s estimate of 196.5 billion yen.
Its flagship technology investment arm, Vision Fund, posted investment gains of 600.7 billion Japanese yen, continuing its recovery from record losses in the previous financial year.
On Wednesday, SoftBank-owned Arm, which designs chips for smartphones and a range of other devices, beat profit estimates and gave strong forecasts as the AI boom boosted sales.
That boosted shares of SoftBank, which closed up 11.06% at 7,350 yen on Thursday, according to LSEG data. They extended their gains on Friday and were last trading at 8,090 yen.
Arm is among the beneficiaries of the AI boom that began last year due to increased interest in generative AI following the launch of OpenAI’s ChatGPT in November 2022. Shares of Arm, listed on the Nasdaq, climbed nearly 48% on Thursday.
“Arm is convincing more people that it is leveraged in AI. This is going to be a very positive inflection point for Softbank’s stock story,” Oliver Matthew, head of Asia consumer at CLSA, said on Friday , on CNBC’s “Squawk Box Asia.”
SoftBank Group Chief Financial Officer Yoshimitsu Goto said Thursday that the company has shifted from an Alibaba-focused portfolio to an AI-focused portfolio.
SoftBank was known for its early bet on the Chinese tech juggernaut Ali Baba in 2000, but recently reduced its stake in Alibaba.
According to Goto, SoftBank’s stake in Alibaba had fallen to almost zero by the end of the December quarter, from 50% at the end of December 2019. Meanwhile, Arm’s share of SoftBank’s asset portfolio increased from 9 % to 32% during the quarter. same period.
– CNBC’s Vivien Soo contributed to this report.
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