SoftBank’s Vision Fund division reported significant gains of 608.5 billion yen ($3.96 billion) in its fiscal second quarter, as the Japanese conglomerate experienced a sharp rise in returns on its tech investments following a shift to profitability in June. For the broader Vision Fund segment, which includes administrative costs and third-party investor gains and losses, SoftBank disclosed a 373.1 billion yen profit, reversing a 204.3 billion yen loss from the previous quarter.
The gains largely stem from valuation increases in SoftBank Vision Fund 1, with notable appreciation in shares of companies like e-commerce platform Coupang, China-based ride-hailing company Didi Global, and tech giant Bytedance. Conversely, the Vision Fund 2 posted a 232.6 billion yen net loss, impacted by declining share prices for Norwegian robotics firm AutoStore and U.S.-based automation company Symbotic.
SoftBank has also benefited from the recent public offering of Arm Holdings, a smartphone chip designer in which it retains nearly 90% ownership. The company’s substantial stake has yielded further returns as demand for high-performance chips grows. This pivot aligns with SoftBank’s strategic repositioning toward artificial intelligence (AI), a sector experiencing significant momentum from key players such as Nvidia, which SoftBank CEO Masayoshi Son described as “undervalued.” Son projects an imminent AI advancement that could be “10,000 times smarter” than humans within a decade and reportedly has committed $500 million to OpenAI’s latest funding round.
SoftBank’s group-wide performance saw net sales increase by 6% to 1.77 trillion yen. The company’s investments also yielded substantial gains, with a reported 1.28 trillion yen profit on shares in Chinese retail giant Alibaba and 566.2 billion yen on T-Mobile stock. Tokyo-listed shares of SoftBank have surged approximately 50% year-to-date.
The company is also responding to pressure from activist investor Elliott Management, which holds a $2 billion stake in SoftBank and previously advocated for a $15 billion share buyback. As of Tuesday, SoftBank confirmed that it had repurchased 153.8 billion yen in shares by the end of its second quarter, part of a 500 billion yen buyback program announced in August.
Market conditions over the summer were turbulent for Japanese companies due to yen fluctuations and a risk-asset sell-off. Barclays analysts noted on Nov. 8 that this volatility may persist, with expectations for continued wage growth and a possible interest rate increase by the Bank of Japan in late 2024 or early 2025.
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