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SoftBank Rebounds to Quarterly Profit with Tech Investment Rally

Strategic shift to AI and semiconductor investments fuels SoftBank's financial recovery
Japan
s 9434.TSE s 9984.TSE Blue Chip 150
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SoftBank Group marked a triumphant return to profitability in the October-December quarter, recording a net profit of 950 billion yen ($6.39 billion), a stark contrast to the loss reported in the same period a year prior. This financial upturn is largely attributed to the appreciating value of its technology investments, notably in the United States. Despite this quarterly gain, the conglomerate still faced a net loss of 458.7 billion yen for the nine-month period ending in December.

A strategic pivot within SoftBank’s vast investment portfolio was highlighted by Chief Financial Officer Yoshimitsu Goto, who noted the transition from a focus on Alibaba Group Holding to emphasizing the U.K.-based semiconductor design company Arm. This move aligns with the company’s increased commitment to advancing artificial intelligence (AI) technologies, with Arm playing a central role in this initiative.

The resurgence in SoftBank’s financial health also benefited from a rally in U.S. stocks, particularly boosting the value of its stake in T-Mobile. Further financial enhancement was seen through gains in the SoftBank Vision Funds, which turned a previous year’s loss into a substantial gain, thanks to successful investments in over 400 companies, including ByteDance and the promising outlook of Indian portfolio companies like Oyo.

Despite the recovery and optimism in strategic sectors, SoftBank exhibited caution in new investments during the quarter, significantly reducing its expenditure compared to previous periods. Nonetheless, the company remains optimistic about its future deal pipeline. Amidst fluctuating market valuations, SoftBank continues to prioritize strategic investment growth over short-term asset liquidation, reflecting a long-term vision for enhancing company value amidst evolving market dynamics.

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