Tech-oriented SoftBank Group (TSE:9984) overnight reported an 18% drop in net profit for the April-June quarter, to 347.3 billion yen ($2.2 billion), down from 421.8 billion yen a year earlier, as higher costs and derivatives losses offset gains from its technology holdings.
The Tokyo-based investment conglomerate, which pours capital into artificial intelligence, energy and robotics ventures under founder Masayoshi Son, notably booked no valuation gain from its stake in ChatGPT developer OpenAI this quarter.
That was in sharp contrast to the fiscal year through March, when SoftBank posted record net income of more than 5 trillion yen, partly driven by the strength of rising OpenAI-related valuations.
Investment gains of 1.86 trillion yen cushioned the quarter, led by an $8.2 billion gain on its stake in chipmaker Intel, whose shares have rallied since SoftBank invested last year as the company underwent restructuring under Son ally Lip-Bu Tan. SoftBank also booked a gain on its holding in ByteDance, owner of TikTok.
"There's clear demand and an overwhelming shortage of supply," chief financial officer Yoshimitsu Goto told reporters in Tokyo when asked about fears of an AI bubble, adding "I think we're in a very healthy state."
SoftBank has separately secured a $10 billion margin loan backed by its OpenAI stake, part of its broader push to monetise and borrow against AI holdings to fund further investment.
The Japanese investor is among the group of closely monitored players as the wider investment audience anxiously stays on "bubble watch".
News Intelligence what this means for the company
SoftBank's first-quarter net profit fell 18% to 347.3 billion yen as derivatives losses and higher costs offset a 1.86 trillion yen investment gain led by an $8.2 billion gain on Intel. The quarter marked a sharp reversal from the prior fiscal year, when record net profit of more than 5 trillion yen was partly driven by rising OpenAI-related valuations; this quarter SoftBank booked zero valuation gain from OpenAI, signalling a pause in the AI-driven earnings momentum that defined 2024–2025.
- SoftBank has secured a $10 billion margin loan backed by its OpenAI stake, expanding its ability to lever AI holdings for fresh capital deployment—a strategy that ties future returns to OpenAI's valuation stability.
The profit decline and zero OpenAI valuation contribution expose SoftBank's earnings volatility to mark-to-market swings in its largest AI bet. However, the $8.2 billion Intel gain and CFO commentary on AI supply shortage suggest the portfolio is generating real gains; the investment case hinges on whether gains from operating holdings and exits can offset the absence of OpenAI revaluation upside.
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Content is for informational purposes only, not financial advice.
