Masayoshi Son's Shift From 'Defense' To 'Offense' Worked As Arm, AI Drive SoftBank Stock To 24-Year High

SoftBank Group Corp SFTBF SFTBY hit a 24-year high of 11,190.00 Japanese yen per share.

This broke the earlier intraday record high of 11,000 yen made on Feb. 15, 2000. SoftBank stock’s surge is attributable to strategic moves in AI and a strong performance by its chip-design subsidiary, Arm Holdings Plc ARM.

A Boost from Arm

The British chip designer Arm, which SoftBank acquired in 2016, has played a pivotal role in this resurgence, reported CNBC.

Chart created using Benzinga Pro

Arm’s stock has surged nearly 124% this year, fueling SoftBank’s impressive market performance. This spike highlights the growing value of Arm’s intellectual property, particularly in sectors like automotive and cloud data centers.

SoftBank's 90% stake in Arm is now a significant asset, contributing heavily to the parent company’s market cap.

Vision Fund Rebounds

SoftBank’s Vision Fund, despite past volatility, has shown signs of recovery. The fund, which faced setbacks from investments in companies like WeWork and various Chinese tech firms, is now posting better financial results. This turnaround is buoyed by the broader recovery in tech stocks and a strategic shift towards AI investments.

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Son’s AI Ambitions

Masayoshi Son, SoftBank's founder, is betting big on artificial intelligence. After a record $32 billion loss in 2023, Son announced a shift from “defense” to “offense,” focusing on AI opportunities. His vision includes developing an AI ecosystem that leverages SoftBank's diverse tech investments. This bold move is aimed at positioning SoftBank at the forefront of the AI revolution.

Read Also: Masayoshi Son’s SoftBank To Raise $1.86B Through Bond Issuance For AI Investment And Debt Repayment

Strategic Moves

SoftBank’s recent inclusion in the Russell 3000 index and a $150 million investment from Coatue to expand its AI infrastructure are further signals of its aggressive growth strategy. Analysts from CLSA and Macquarie highlight SoftBank's foresight in AI investments as a key driver for future value. They also note the current discount in SoftBank's stock price relative to its asset value, suggesting potential for further appreciation.

As SoftBank navigates the tech landscape with strategic investments in AI and a solid performance from Arm, its stock is positioned for continued growth. Investors seem to be buying into the Arm story, if not the broader SoftBank narrative, marking a significant shift in market sentiment. With AI at the helm, SoftBank’s journey to new peaks appears just beginning.

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