(Bloomberg) — After adding more than $65 billion in market value over the past four months, the fate of SoftBank Group Corp. shares is more firmly attached to the global artificial intelligence boom than ever before.
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Investors are returning to Masayoshi Son’s flagship company thanks to its key position in Donald Trump’s AI strategy, stake in OpenAI and growing holdings in major names such as Nvidia Corp. These will hold more sway over SoftBank’s stock than tariffs, geopolitics or even the company’s upcoming earnings report.
Short bets on the company stand at less than half the recent peak level, and forward earnings estimates have climbed to a three-year high. While Japanese shares face economic and political uncertainty, SoftBank is seen less tied to its home market and more correlated with American peers.
“In addition to the ongoing AI-related investment trend, SoftBank Group’s earnings and share price tend to be closely linked to US equities,” said Tomoaki Kawasaki, a senior analyst at Iwaicosmo Securities Co. So elevated US share prices along with expectations of Federal Reserve rate cuts may act as further tailwinds, he added.
SoftBank’s Tokyo-listed stock has more than doubled from its early April low, ranking it among the top 10 Nikkei 225 performers in that span. Its gains have tracked a resurgence in the global AI trade as major hyperscalers continue aggressive spending on the technology.
Its shares climbed to a fresh record high Wednesday after news that OpenAI is in talks on a potential sale of stock at a valuation of about $500 billion. Optimism has risen that SoftBank will profit from such investments as well as its participation in the Trump-backed Stargate Project to develop US tech infrastructure.
“We turned very bullish on SoftBank Group when it announced the Stargate project, not really because of the returns on potential data centers but because it signified its critical role in helping US AI expansion,” CLSA Securities Japan Co. analyst Oliver Matthew wrote in a July 24 note. “The shares have risen but remain highly discounted considering potential AI upside.”
The stock trades at a discount of roughly 40% to net asset value, as investors warily eye its complicated investments in various listed and unlisted companies as well as its Vision Fund. Shares of Arm Holdings Plc — which account for the biggest portion of SoftBank’s NAV — have lagged as the chipmaker spends massively on an AI push.
