SoftBank swings to profit on Nvidia bet ahead of AI push

SoftBank Corp reported a net profit of 421.8 billion yen (US$2.9 billion) for the June quarter, beating analyst expectations of 158.2 billion yen (US$1 billion).

The Japanese investment firm saw profits from its Vision Fund reach 451.4 billion yen (US$3 billion), driven by gains in holdings such as Nvidia and Coupang.

SoftBank increased its Nvidia stake to over US$3 billion as of end-March 2025, benefiting from a 46% rise in the chipmaker’s shares during the quarter.

The company has also been adding shares in TSMC while selling off other assets to focus on AI.

SoftBank shares rose 1.5% on August 7, 2025 despite concerns about economic uncertainty slowing progress on the Stargate AI data center project.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ SoftBank’s persistent conglomerate discount highlights market skepticism

Despite SoftBank’s strong Q1 results and Vision Fund gains, the company continues trading at a significant discount to its underlying assets, approximately 40% below the value of its holdings1.

This discount pattern reflects a persistent challenge for investment holding companies where markets don’t value diversified portfolios at full sum-of-parts pricing.

The disconnect is particularly striking given SoftBank’s $3 billion Nvidia stake alone has generated substantial gains, yet the parent company’s market capitalization of around $118 billion remains well below the theoretical value of its key investments2.

The Vision Fund monetized nearly $2 billion in assets during the first half of 2025, demonstrating SoftBank’s ability to realize gains. However, investor confidence appears tempered by concerns over execution risk across multiple ambitious projects3.

This discount suggests markets remain cautious about SoftBank’s ability to manage the complexity of simultaneously funding large-scale projects and investments.

2️⃣ Strategic positioning in AI value chain requires massive capital coordination

SoftBank’s AI investment strategy extends beyond individual stock picks to building an integrated ecosystem across the AI value chain.

The company has strategically invested $3 billion in Nvidia, $330 million in TSMC, and $170 million in Oracle, positioning itself across chip design, manufacturing, and cloud infrastructure3.