SoftBank Group Corp. shares skyrocketed nearly 13% on Tuesday, hitting an all-time intraday high of 8,000 yen and extending a four-day winning streak. The rally cements Masayoshi Son’s technology investment conglomerate as a standout winner from the ongoing artificial intelligence frenzy. Analysts attribute the surge to investors reassessing SoftBank’s deep ties to two pivotal AI assets: Arm Holdings and OpenAI.
Arm Holdings: The Chip Designer Powering AI Hardware
SoftBank owns roughly 90% of Arm, the British chip designer whose architectures underpin smartphones, servers, and an expanding array of AI computing systems. This stake makes Arm one of SoftBank’s most direct links to the AI hardware boom. SMBC Nikko raised its price target for SoftBank to 8,500 yen from 5,200 yen, implying further upside of about 6.25%, driven chiefly by improved Arm exposure. The timing is crucial: Nvidia’s latest quarterly results, released last week, reinforced market conviction that AI chip demand is far from peaking.
OpenAI: A Multibillion-Dollar Bet That Is Paying Off
SoftBank’s position in ChatGPT creator OpenAI is now worth nearly $80 billion, with the company already booking approximately $45 billion in gains. That staggering return is reshaping how investors value SoftBank—no longer as a sprawling tech conglomerate with a mixed startup record, but increasingly as a high-conviction AI vehicle. Son’s concentrated investment style is back in the spotlight. However, there are cautionary signals: SoftBank’s cumulative OpenAI investment could reach $64.6 billion for a 13% stake, prompting S&P Global Ratings to revise its outlook on the company to negative in March, citing competitive pressures on OpenAI and portfolio liquidity strains. Yet markets have so far shrugged off those concerns.
Funding the AI Thrust: $1.6 Billion Retail Bond Offering
In a parallel move, SoftBank announced plans to raise about $1.6 billion (260 billion yen) through a 35-year subordinated hybrid bond targeted primarily at retail investors. Early guidance suggests a coupon of 4.8% to 5.6% for the initial five years—a highly attractive yield in Japan’s low-rate environment. The bonds carry elevated risk: they rank below senior debt and allow deferred interest payments under certain conditions. Rating agencies are expected to treat roughly half the instruments as equity. Proceeds will refinance existing dollar-denominated hybrid debt and support SoftBank’s aggressive AI investment strategy. This follows a similar 418 billion yen retail bond sale in April and broader institutional dollar and euro offerings.
Despite lingering credit-default swap spreads among the widest for a major Japanese corporation, investors appear willing to accept the risk as long as the AI narrative holds. The key question remains whether the rally is a short-term momentum trade or a durable re-rating built on SoftBank’s AI exposure.
