Masayoshi Son's Softbank Beats Analyst Expectations: Record Staggering $1.5B Quarterly Profit, Bolstered By Arm's Valuation And AI

SoftBank Group Corp SFTBY has reported a quarterly net profit of $1.5 billion, driven by the soaring valuation of Arm Holdings, as it continues to amass funds for its artificial intelligence expansion.

What Happened: The Japanese conglomerate’s profits for the quarter ending in March exceeded analysts’ expectations of JP¥23.3 billion ($149.5 million approx), according to Financial Times.

Despite this, SoftBank’s full-year net loss amounted to JP¥227.6 billion ($1.46 billion), with the group’s tech-heavy Vision Funds recording a quarterly investment loss of JP¥57.5 billion ($368 million).

However, investors and analysts remain optimistic about SoftBank’s AI strategy, centered around UK chip designer Arm. This optimism is fueled by the company’s recent quarterly profit and ongoing efforts to build a war chest for its AI push.

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Notably, this is the first time SoftBank has posted an annual profit since the fiscal year ending March 2021, when the COVID-19 pandemic significantly boosted the tech stock market.

Why It Matters: This quarterly profit comes on the heels of SoftBank’s strategic shift from venture capital to investments in semiconductors and AI. The company’s flagship Vision Fund has been divesting or marking down billions of dollars in publicly listed holdings since the end of 2021.

SoftBank has also been making significant investments in AI, including a $960 million investment in the development of an advanced AI model, powered by NVIDIA Corp NVDA chips.

This move aligns with SoftBank’s broader strategy to establish itself as a major player in the AI market, as evidenced by founder Masayoshi Son‘s plan to raise $100 billion for a new chip venture targeting the AI market.

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