Softbank's stock price hits its highest increase in nearly five months! Partnering with Oracle Corporation (ORCL.US), OpenAI, and other companies, they are "throwing" hundreds of billions of dollars investing in AI infrastructure.

SoftBank Group announced that it will collaborate with OpenAI, Oracle Corporation (ORCL.US), and Abu Dhabi-backed MGX Corporation on a project named "Stargate" to build a $500 billion data center and infrastructure in the United States. Following this announcement, SoftBank's stock surged by 12% in the Japanese market, marking its largest single-day increase since August of last year. Oracle Corporation and SoftBank's chip design company, Arm Holdings (ARM.US), also saw gains in the US stock market. Aside from SoftBank, at the time of writing, Oracle Corporation's stock price had risen by 8.54% and Arm Holdings had risen by 4.38% in after-hours trading. SoftBank founder Masayoshi Son stated that the four companies will invest in creating a joint venture, immediately investing $100 billion in infrastructure development, and planning to invest at least $500 billion over the next four years to enhance computational power. Following President Donald Trump's announcement to promote artificial intelligence, SoftBank mentioned in a statement that companies including Microsoft Corporation (MSFT.US) and chip manufacturer NVIDIA Corporation (NVDA.US) will provide technology. Macquarie analyst Paul Golding noted in a report to investors that while the financing considerations for the Stargate project remain key, the participation of this Japanese technology conglomerate with AI giants showcases the quality and value of SoftBank's assets and technology investment management. Prior to the announcement, Son had promised to invest $100 billion in the United States over the next four years during a press conference held at Trump's Mar-a-Lago estate in Florida. The deal is expected to include investments in artificial intelligence, data centers, semiconductors, and energy. It is currently unclear whether these two statements refer to the same or different projects. As Son's promoted project expands to a snowballing scale of hundreds of billions of dollars, many question how such a large sum of money will be raised. SoftBank holds stakes in hundreds of startups and owns 90% of Arm, which it could sell to finance any major bets. Bloomberg Intelligence credit analyst Sharon Chen stated, "Assuming no external capital is raised, SoftBank Groups investment in Stargate, a joint venture with OpenAI, Oracle Corporation, and MGX to invest $500 billion in AI infrastructure over the next four years in the United States, could strain its credit metrics." According to a 30% adjusted LTV cap at Pool Corporation, the company may have around $300 billion of headroom, and with a track record of managing leverage through asset sales, its stake in Arm is currently valued at over $140 billion. Since the end of 2022, following significant losses in the Vision Fund, Son has been working to reshape SoftBank's strategy, focusing on artificial intelligence, chips, and energy. Astris Advisory analyst Kirk Bradley remarked that this news is "good news for SoftBank." "We expect that now that we know SoftBank's direction, the market will start to consider the upside in valuation with regards to artificial intelligence."