SoftBank Group posted net profit of 347.3 billion yen for the quarter ended June, down 18% year over year, though the result came in far above the market’s average estimate of 166 billion yen. The main support came from investment gains tied to Intel shares.
Intel position offset pressure elsewhere
According to Bloomberg, SoftBank bought Intel Corp. (INTC) shares last year at $23 each. Intel climbed 216% during the quarter, allowing SoftBank to book 1.3 trillion yen in unrealized investment gains, equivalent to about $8.5 billion.
That gain helped make up for losses in parts of the Vision Fund portfolio and slower growth in profits tied to SoftBank’s OpenAI investment. As a result, the company’s profit decline was smaller than the market had expected.
AI expansion brings debt questions back into focus
As founder Masayoshi Son pushes deeper into generative AI, investors are paying closer attention to SoftBank’s balance sheet. The company is expected to complete about $65 billion in cumulative investment in OpenAI by October.
To raise the required capital, SoftBank signed a one-year $40 billion bridge loan. It also arranged a $20 billion margin loan backed by shares in chip designer Arm.
Market concerns center on what happens if financing costs and debt burdens tied to global data center construction keep rising. Under that scenario, SoftBank’s highly leveraged positioning could add to its financial risk.
AI competition is rising as business models face scrutiny
The current AI boom is showing signs of divergence. Leading U.S. companies including OpenAI and Anthropic are still raising large amounts of capital, and their valuations are moving toward the $1 trillion mark. At the same time, they are facing pressure from Chinese rivals offering models with similar performance at lower cost.
Questions also remain over how these companies will turn heavy infrastructure spending into clear profit models. The gap between AI capital expenditure and actual financial returns remains a central uncertainty for investors assessing the sector.
Share price swings track sentiment around OpenAI
SoftBank’s share performance has closely reflected shifts in market sentiment around AI. In June, support from Arm, OpenAI and AI infrastructure investment plans briefly pushed SoftBank’s market value to the top of the Tokyo Stock Exchange.
That momentum later faded as the market weighed a possible delay to OpenAI’s listing timeline, along with disputes over model safety and unauthorized conduct. SoftBank shares have now given back more than half of this year’s gains, and the report said the stock is down more than 30% from its June peak.
Investors had hoped an OpenAI initial public offering would improve transparency around the many unlisted and not yet profitable startups held in SoftBank’s portfolio. Any change in that listing plan is likely to keep influencing how the market values the group.