SoftBank's fiscal first-quarter profit beat analyst forecasts after a large gain on its Intel stake and a rise in the value of its ByteDance holding. Net profit still fell from a year earlier, and the company recorded no investment gain or loss tied to OpenAI this quarter — a sharp reversal from the prior quarter, when OpenAI drove nearly all of the Vision Fund's gain.
A 1.3 trillion yen ($8.2 billion) gain on SoftBank's Intel stake pushed the Japanese investment group's fiscal first-quarter profit past forecasts, even as its return from OpenAI stayed flat.
Profit beats forecasts despite a yearly decline
SoftBank reported net profit of 347.3 billion yen ($2.2 billion) for the three months through June, above the 120.23 billion yen analysts had expected according to LSEG estimates. The result still marked a decline of nearly 18% from the same quarter last year.
Intel and ByteDance carry the Vision Fund
The investment division, separate from the Vision Fund, booked a 1.05 trillion yen segment profit, helped by the Intel gain. Its Vision Funds, which house investments spanning OpenAI to ByteDance, gained $1.7 billion in value during the quarter.
That gain came mainly from a $2.2 billion increase in the value of the ByteDance stake, which offset declines in companies like PayPay. Vision Funds segment profit reached 5.4 billion yen, down from 451.4 billion yen a year earlier.
OpenAI sits out this quarter's gains
SoftBank recorded no investment gain or loss tied to OpenAI this quarter. That contrasts with the previous quarter, when the Vision Funds posted a nearly $20 billion gain, almost all driven by OpenAI.
The group has committed more than $60 billion to OpenAI for an eventual roughly 13% stake. It said $55 billion of that has already been invested.
SoftBank has also put in place $40 billion in bridge loans for its latest OpenAI investment and holds margin loans against its nearly 90% stake in Arm. It is a sign of the leverage behind Son's AI bets.
AI computing losses widen
Its AI computing segment, which includes Arm, Graphcore and Ampere, posted a 200.8 billion yen loss, wider than the 32.4 billion yen loss recorded in the same quarter last year. The company attributed the wider loss to higher research and development costs at the underlying companies.
Investors are heavily scrutinizing AI spending across the sector and looking for tangible returns. SoftBank's shares have fallen around 34% from their June record high.
The stock had briefly made SoftBank Japan's most valuable company before it slipped back to third place, behind MUFG and Toyota.
Sources: CNBC, Financial Times
Trading involves risk.
Risk Disclaimer
