SoftBank Group Earnings: All-In On AI, But At What Cost?

2025-05-14 11:15:59 ET

Summary

• SoftBank's fiscal year 2024 earnings were positive for the first time in four years.
• Concerns arise over SoftBank's $40 billion investment in OpenAI, valuing the startup at ~$300 billion, and the high valuation of its ARM investment.
• SoftBank Vision Funds show poor performance, with combined cumulative losses despite many successful public listings.
• SoftBank's leverage and overvalued assets are key risks, but they are mitigated by shares trading at a deep discount to NAV.

For better or worse, SoftBank's ( SFTBF )( SFTBY ) Founder and CEO Masayoshi Son has decided to go all-in on artificial intelligence investments. That was made very clear when the company reported fiscal year 2024 earnings , which were positive for the first time in four years. One of the first slides drove home this point by saying that the SoftBank Group is "Mobilizing the full strength of the Group to realize [Artificial Super Intelligence] ASI". As much as we believe in the transformative power of artificial intelligence, we do worry that the company might be investing at extreme valuations in some cases....

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