TLDRs;
- SoftBank shares surged over14% after reporting a record $2.9 billion Q2 profit, driven by AI investments.
- Q2 profit exceeded expectations by over three times, signaling strong AI momentum.
- SoftBank’s AI portfolio, including Nvidia and OpenAI stakes, boosted valuations and improved loan-to-value ratio.
- Japan’s Topix index hit a record high, led by SoftBank’s market surge amid growing AI excitement.
SoftBank Group’s stock has jumped an impressive 14.41% in the past 5 days to a new record high on Thursday following the announcement of its quarterly earnings that blew past analyst predictions.
The Japanese investment giant reported a net profit of 421.8 billion yen (approximately $2.9 billion) for the April to June quarter, reversing losses from the same period last year and marking a significant turnaround fueled by its bold bets on artificial intelligence (AI).
This remarkable profit figure was more than triple the 127.6 billion yen that analysts had anticipated, a testament to the company’s successful pivot toward AI investments. SoftBank’s commitment to AI, highlighted by its $30 billion investment in OpenAI and leadership in the $500 billion Stargate data center project, is translating into tangible financial gains rather than speculative hopes.
AI Investments Propel Portfolio Value
The surge in SoftBank’s shares was not just about headline profits but also reflected growing market enthusiasm for its AI-related holdings.
Notably, the company’s Vision Fund achieved significant gains, driven by stakes in major technology firms like Nvidia and Coupang. SoftBank increased its Nvidia holdings to over $3 billion by the end of March 2025, benefiting from a 46% rise in Nvidia shares during the quarter.
These portfolio gains helped improve SoftBank’s loan-to-value ratio to 17% at the end of June, down from 18% three months earlier. This ratio improvement signals rising valuations across its assets, which has helped narrow the persistent discount at which SoftBank shares had traded. For five consecutive quarters prior, SoftBank stock traded at more than a 50% discount to the net asset value of its holdings, reflecting market skepticism about the conglomerate’s strategy.
SoftBank Leads Topix Index Rally
SoftBank’s share price surge was the largest contributor to gains in Japan’s Topix index, which crossed the 3,000-point threshold for the first time.
The rally is indicative of the broader market’s renewed confidence in AI-driven companies and the prospects of conglomerates successfully adapting to technological shifts.
Despite concerns about economic uncertainty and potential slowdowns in projects like the Stargate AI data center, investors responded positively to SoftBank’s strong quarterly performance and strategic focus on AI. The market appears to be reassessing the company’s value, now seeing clearer evidence of growth and innovation paying off.
Challenges Remain Amid Growing Optimism
While the earnings beat has boosted investor sentiment, SoftBank still faces challenges typical of large investment holding companies.
The firm continues to trade below the theoretical sum-of-parts value of its holdings, partly due to lingering concerns about economic headwinds and the sustainability of rapid AI growth.
Nonetheless, the monetization of nearly $2 billion in assets by the Vision Fund during the first half of 2025, along with portfolio rebalancing toward AI-centric firms like TSMC, shows management’s intent to sharpen focus and unlock value. If the AI momentum sustains, SoftBank could continue closing the gap between market price and asset value, potentially rewarding investors further.
That said, Softbank’s company’s strategic realignment and portfolio gains have turned investor sentiment around, positioning SoftBank as a key player in the evolving AI-driven tech landscape.
