SoftBank's AI Gambit Pays Off: Profits Surge Amid Nvidia Boom

SoftBank Group has shifted back to profitability in the fiscal quarter ending in June, largely driven by gains from holdings such as Nvidia and Coupang Inc. This achievement further supports founder Masayoshi Son's strategic focus on the expanding field of artificial intelligence technologies.

In its first-quarter earnings report, SoftBank displayed a net profit of 421.82 billion yen (approximately $2.9 billion), exceeding analyst predictions of 158.23 billion yen. This profit surge is bolstered by its Vision Fund, which reported gains of 451.39 billion yen.

Son is doubling down on AI hardware investments, capitalizing on the sector's vigorous growth. A key element of this strategy is SoftBank's enhanced investments in companies like Nvidia and Taiwan Semiconductor Manufacturing Co., while simultaneously trimming holdings in less relevant assets.

By the end of March, SoftBank increased its Nvidia stake to exceed $3 billion, benefiting significantly from Nvidia's 46% surge during the aforementioned quarter, which enhanced SoftBank’s investment portfolio.

The market value of SoftBank Group has surged by more than $65 billion over the past four months. Looking ahead, the company’s stock trajectory is anticipated to align even more closely with the burgeoning global AI development than before.

Thanks to SoftBank's pivotal role in the American AI strategy under President Donald Trump, as well as its stake in OpenAI and continued investment in major stocks like Nvidia, the company has drawn investors back into its fold. These elements are projected to exert a greater influence on SoftBank’s stock price than macro factors such as tariffs, geopolitical tension, or even upcoming earnings reports.

The company's Tokyo-listed shares have more than doubled since early April, ranking among the top performers within the Nikkei 225 index during this time. As major players persist in investing heavily in AI technologies, similar rebound trends are observed among global AI-related stocks.

SoftBank is strategically acquiring stock in Nvidia and TSMC to emphasize Son's commitment to foundational tools and hardware for AI. Regulatory filings reveal that SoftBank boosted its Nvidia holdings to about $3 billion by March, while also purchasing TSMC stocks worth about $330 million and Oracle stocks at $170 million.

SoftBank's Vision Fund has previously faced substantial losses which had postponed its AI initiatives. Through reacquiring shares in Nvidia and partner TSMC, Son is maneuvering to regain a strong footing in the semiconductor supply chain, reasserting influence over this pivotal sector.

Despite the monumental AI investments and strategic alliances being pursued by Son, insiders suggest he is still aiming higher, envisioning future U.S. ventures that could potentially position SoftBank as a trillion-dollar leader within the AI industry.