SoftBank Group on Thursday reported a significantly better-than-expected fiscal first-quarter profit, driven by a strong rebound in its Vision Fund segment.
The Japanese investment conglomerate posted a profit of ¥421.8 billion (approximately $2.87 billion) for the quarter ended June, well above the ¥127.6 billion consensus forecast compiled by LSEG.
The performance marks SoftBank’s second consecutive quarterly profit, a notable recovery from the ¥174.28 billion loss reported in the same period last year.
Vision Fund leads the turnaround
The sharp improvement was led by SoftBank’s Vision Fund tech investment unit, which recorded a ¥451.4 billion profit in the first quarter, reversing a loss in the same period a year earlier.
The value of Vision Fund assets rose by $4.8 billion during the quarter, buoyed by gains in public companies such as Singapore-based ride-hailing firm Grab and Indian food delivery platform Swiggy.
SoftBank also cited positive performance from private investments in some of its Indian portfolio companies.
The Vision Fund’s rebound is likely to be welcomed by investors as a sign that SoftBank’s aggressive bets in artificial intelligence and emerging tech are starting to yield results.
Despite the Vision Fund’s strong showing, losses in other parts of SoftBank’s portfolio weighed on the group’s overall results.
The company reported an investment loss of ¥256.55 billion from other holdings in the June quarter, driven by the sale of shares in T-Mobile and Alibaba.
SoftBank disclosed that it sold 13 million shares of T-Mobile in August for approximately $3 billion.
These losses were partially offset by gains from holdings in Nvidia.
Chip design firm Arm, which is majority-owned by SoftBank, posted a ¥8.66 billion loss in the quarter.
SoftBank attributed this to a sharp increase in research and development expenses outpacing revenue growth.
Softbank’s AI Bet
SoftBank has continued to double down on AI-related investments.
The company is leading a $40 billion funding round into OpenAI, the developer of ChatGPT, and is also awaiting regulatory approval for its proposed $6.5 billion acquisition of AI chipmaker Ampere Computing.
These moves underscore SoftBank’s broader strategic shift toward AI as it seeks to reposition itself for long-term growth.
Meanwhile, SoftBank has emerged as a key player in the ambitious $500 billion Stargate project in the United States, which aims to build advanced data centres and AI infrastructure.
The strong quarterly result follows SoftBank’s return to annual profitability for the fiscal year ended March, its first in four years.
That rebound was aided by gains in legacy investments including Alibaba, T-Mobile, and Deutsche Telekom.
While the latest quarterly performance underscores progress in SoftBank’s pivot to AI and tech-led growth, the firm’s ability to manage its high-risk investment strategy and fund large-scale projects like Stargate remains a key area of investor focus going forward.
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