Japanese conglomerate SoftBank (SFTBY) (JP:9984) reported its second-quarter results, with net profit more than doubling to ¥2.5 trillion ($16.6 billion). The profit was mainly boosted by gains from its OpenAI (PC:OPAIQ) investments. Along with its results, SoftBank sold its entire stake in Nvidia (NVDA), earning about $5.8 billion in a surprise move.
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SoftBank’s exit from Nvidia comes as it shifts focus toward bigger AI investments instead of keeping its stake in Nvidia’s growing business. Looking ahead, attention will focus on its next round of investments and which areas the conglomerate chooses to back.
OpenAI Boosts SoftBank’s Vision Fund
In the second quarter, SoftBank’s Vision Fund, its technology-focused investment fund, reported an investment gain of ¥3.5 trillion, mainly from its ¥2.16 trillion holding in OpenAI, the creator of ChatGPT.
In October, SoftBank reportedly approved the final portion of its $30 billion investment in OpenAI. Looking ahead, SoftBank said it plans to invest an additional $22.5 billion in OpenAI through Vision Fund 2 in December.
Overall, SoftBank’s revenue reached ¥1.92 trillion for the quarter, slightly above the 1.9 trillion yen estimate from LSEG. Meanwhile, its net profit far exceeded the ¥207 billion average forecast by three analysts surveyed by LSEG.
SoftBank Surges on AI Boom
SoftBank’s strong results come during a tech stock rally that has pushed its share price to record levels. However, the stock fell last week as worries about an AI bubble rattled global markets. Still, year-to-date, SFTBY stock is up more than 150%.
Additionally, SoftBank announced a four-for-one stock split at the end of the year to make its shares more accessible to investors and expand it shareholder base.
Is SoftBank a Good Stock to Buy?
SoftBank’s OTC-listed shares currently have no Wall Street coverage. However, TipRanks’ A.I. analyst rates SFTBY stock as Outperform and sets a price target of $84, suggesting an upside of more than 16% from current levels.
