Masayoshi Son bets on NVIDIA, Taiwan Semiconductor, and Oracle, making a staggering $4.8 billion in the second quarter, with SoftBank's profits exceeding expectations

Thanks to the strong returns of the Vision Fund in the AI sector, SoftBank Group has delivered a financial report that far exceeds market expectations.

On Thursday, SoftBank Group announced its financial report for the first fiscal quarter ending June 30. The report showed that SoftBank's net profit for the first quarter reached 421.8 billion yen (approximately 2.9 billion USD), far exceeding analysts' expectations of 127.6 billion yen, marking the second consecutive quarter of profitability and successfully reversing the losses from the same period last year.

The flagship investment division, Vision Fund, became the largest driver of profit, with the fund achieving a value increase of 4.8 billion USD this quarter, contributing 451.4 billion yen in profit to SoftBank.

The significant improvement in performance is mainly attributed to the overall recovery in technology stock valuations, particularly SoftBank's holdings in NVIDIA. The report indicated that NVIDIA's stock price soared 46% during the quarter, bringing substantial investment returns to SoftBank.

This achievement supports Masayoshi Son's bolder AI strategy and further consolidates market confidence in its AI strategy.

SoftBank's stock rose over 1% on Thursday, reaching a historic high.

Vision Fund Turns Losses into Profits, NVIDIA and Taiwan Semiconductor Become Key Bets

The SoftBank Vision Fund performed strongly in the second quarter, recording a profit of 451.4 billion yen, becoming the main driver of the group's performance and sweeping away the losses from the same period last year, with the fund's value increasing by 4.8 billion USD.

According to SoftBank, the growth in fund value is attributed to the overall recovery in technology stock valuations and the excellent performance of some listed and unlisted portfolio companies.

Specifically, among the listed companies, besides NVIDIA, ride-hailing company Grab, online car platform Auto1 Group SE, and warehouse robotics company Symbotic also saw a rebound in value, contributing to the fund's earnings.

In terms of unlisted assets, investments in the Indian food delivery platform Swiggy Ltd. and other private Indian companies also brought positive returns.

Additionally, SoftBank gained substantial returns through precise investments in chip stocks.

SoftBank has positioned semiconductor companies like NVIDIA and Taiwan Semiconductor as its core holdings. As of the end of March, SoftBank had increased its holdings in NVIDIA to over 3 billion USD, fully enjoying the stock price surge brought about by the AI boom.

The report indicated that the earnings from NVIDIA partially offset the investment losses SoftBank incurred from selling shares of T-Mobile and Alibaba.

“Stargate” and OpenAI, a Trillion-Dollar AI Blueprint Emerges

Against the backdrop of recovering profits, Masayoshi Son is advancing a series of unprecedented AI projects.

Among them, the most notable is the “Stargate” project in collaboration with OpenAI and Oracle, which aims to invest up to 500 billion USD in building data centers and AI infrastructure in the United States In addition, SoftBank is also deeply involved in the financing of AI leader OpenAI. Information shows that SoftBank is leading a round of financing for OpenAI amounting to $40 billion and plans to add an additional $30 billion investment.

SMBC Nikko Securities analyst Satoru Kikuchi pointed out in a report that the key point in assessing SoftBank's future lies in whether the "Stargate" project can be smoothly advanced, and whether additional investment in OpenAI is feasible given the changes in its management.

To prepare sufficient "ammunition" for its AI strategic transformation, SoftBank has been divesting non-core assets.

Following the sale of its long-term holdings in Alibaba and Deutsche Telekom, SoftBank raised approximately $4.8 billion in June by selling shares of T-Mobile US Inc., and in August, it sold an additional $3 billion worth of T-Mobile shares.

This approach of "stockpiling for winter" has gained recognition from some market participants. Ashwin Binwani, founder of Alpha Binwani Capital, commented:

“We are cautiously optimistic about the long-term prospects of SoftBank Group and believe its business will continue to expand. We are prepared for volatility and view it as a buying opportunity.”