SoftBank makes precise bets on NVIDIA and TSMC with Q1 net profit far exceeding expectations at $2.9 billion, further stocking up ammunition for AI investments.

Softbank exceeded expectations in the first quarter with profits, thanks to its investments in NVIDIA Corporation (NVDA.US) and other startups. The company reported a net profit of 421.82 billion yen (approximately 2.9 billion USD) for the first quarter ending on June 30, more than double the analysts' average expectations. The iconic Vision Fund's profit of 451.39 billion yen became the biggest driving force behind the profit, benefiting from the valuation recovery in the technology industry and investment returns from companies like Coupang, Auto1, Symbotic, and Swiggy. Notably, Softbank's stake in NVIDIA Corporation, as of the end of March, had increased to over 3 billion USD. The financial report shows that NVIDIA Corporation's stock price surged by 46% in the quarter, and Softbank benefitted from the AI dividend. Softbank also benefited from its holdings in Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) while continuing to sell some less relevant assets. These investments have provided support for founder Masayoshi Son's bet on artificial intelligence technology. The recovery trend of the troubled Vision Fund under Softbank is helping Masayoshi Son to increase investment in order to seize the investment opportunities in the booming field of AI hardware. President Trump threatened to impose tariffs on 100% of chips, but exempted companies that would move production to the U.S., injecting optimism into Softbank's joint investment of 500 billion USD with OpenAI and Oracle Corporation in the "Stargate" data center project. This led to a new high in the stock price of this Japanese company. Masayoshi Son hopes to play a more central role in the promotion of AI through a wide range of collaborations (such as the "Stargate" project and plans to invest 30 billion USD in OpenAI). Masayoshi Son is also in talks with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and other companies, hoping they will participate in establishing a 1 trillion USD AI manufacturing center in Arizona. Ashwin Binwani, founder of Alpha Binwani Capital, said, "We are cautiously optimistic about Softbank's long-term prospects, as many believe its business will continue to expand. We are prepared to deal with fluctuations and see them as opportunities to buy low. However, as interest rates gradually rise, concerns are rising about whether Softbank can meet the massive capital requirements. Therefore, its stock price still has a significant discount compared to its total net asset value. According to media reports in May, due to market volatility, uncertainty in U.S. trade policies, and doubts about financial valuations of AI hardware, some progress in the transactions behind "Stargate" has slowed down. The company stated that Softbank's plan to acquire chip design company Ampere Computing Holdings for 6.5 billion USD still needs approval from U.S. anti-monopoly regulators and the Committee on Foreign Investment in the United States. The deal may face a lengthy review process. In order to provide sufficient "ammunition" for AI investments, Softbank has been divesting non-core assets. Following the sale of its long-term holdings in Alibaba Group Holding Limited Sponsored ADR and Deutsche Telekom, in June of this year, it raised about 4.8 billion USD through the sale of T-Mobile US (TMUS.US) shares, and then sold T-Mobile shares worth 3 billion USD in August. Satoru Kikuchi, an analyst at SMBC Nikko Securities, wrote in a report earlier this year, "Key points to consider when evaluating Softbank include whether the 'Stargate' project in the U.S. (involving investment in AI infrastructure) will continue to move forward; and whether further investment in open AI companies is feasible under unstable management conditions."