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SoftBank earnings today showed that the firm swung back into profit in its fiscal third quarter, largely driven by founder Masayoshi Son’s large and growing investment in OpenAI. For some context, SoftBank made a staggering $41 billion investment in OpenAI last year. And that now sees the firm hold approximately 11% stake in OpenAI.It’s been the market rhetoric for a while now that SoftBank is basically a proxy trade for OpenAI and that is clearly showing up in their earnings and valuations. And not to mention, their share price growth too. The firm is basically doubling down on this, with what looks to be very much an “all in” play.To keep funding their bets on OpenAI, SoftBank notably sold its entire $5.8 billion stake in Nvidia by late 2025. It also sold off a significant portion of its T-Mobile stake for roughly $12.7 billion.So, that speaks to their conviction and how much SoftBank is risking in putting all their chips on OpenAI.Anyway, the headline above comes after their earnings report and relates to reports of SoftBank being in talks for another $30 billion investment into OpenAI. It looks like SoftBank is trying to play coy here but from what we know about Masayoshi Son, it feels like the bets on OpenAI will just keep increasing at this point.If the $30 billion investment goes through, SoftBank will start to rival Microsoft in its exposure in OpenAI – which is roughly a 27% stake at this point.
This article was written by Justin Low at investinglive.com.
💡 DMK Insight
SoftBank’s return to profitability is a game-changer, fueled by its massive bet on OpenAI. This shift in earnings could signal a broader trend where tech investments, particularly in AI, are becoming more lucrative. For traders, this means keeping an eye on tech stocks and related sectors, as SoftBank’s success might encourage more capital flow into AI-focused companies. If SoftBank’s stock reacts positively, it could set a precedent for other firms to follow suit, potentially driving up valuations across the tech landscape. Watch for any ripple effects in the broader market, especially in stocks tied to AI advancements. However, there’s a flip side: if SoftBank’s profits are too reliant on one investment, it raises questions about sustainability. Traders should monitor how this impacts SoftBank’s stock price and consider the volatility that may arise from such concentrated investments. Key levels to watch would be SoftBank’s recent highs and lows, as any breakouts or breakdowns could signal broader market sentiment.
📮 Takeaway
Keep an eye on SoftBank’s stock movements and broader tech sector trends, especially around AI investments, as they could signal significant market shifts.
