CNBC
On Thursday, shares of SoftBank Group experienced a notable increase, rising over 16% following Nvidia's impressive earnings report, which underscored the robust growth within the artificial intelligence sector.
SoftBank Group's ascent, occurring after five consecutive sessions of decline, reflects its close association with the thriving AI market through its significant investment in Arm Holdings, which provides chip designs essential for AI servers and data centers reliant on Nvidia technology. Additionally, SoftBank has reaped benefits from its substantial investment in OpenAI.
The company has invested more than $30 billion in OpenAI, realizing gains amounting to $45 billion for the fiscal year that concluded in March.
The rally in SoftBank's shares was further fueled by revived optimism regarding a potential public offering for OpenAI, contributing to a rise in Arm Holdings' stock, as noted by Andrew Jackson, head of Japanese equity strategy at Ortus Advisors.
While the market largely anticipated these developments, Jackson emphasized to CNBC that the scale of SoftBank's share surge was particularly noteworthy given the conglomerate's significant exposure to AI-related investments. Arm Holdings' shares also saw a robust increase, closing over 15% higher during U.S. trading hours.
Analysts from Fitch Ratings' unit CreditSights reaffirmed an "outperform" status for SoftBank Group's debt, highlighting that the recent surge in Arm Holdings' stock has substantially bolstered the conglomerate's balance sheet, despite its aggressive forays into artificial intelligence.
Nvidia's earnings report revealed another exceptional quarter, with revenue skyrocketing by 85%, reaching $81.62 billion compared to $44.06 billion in the prior year. Furthermore, the tech giant announced a substantial $80 billion share repurchase program along with an increase in its dividend.
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