Softbank Group Corp’s stock rose 1.5 percent to a new lifetime high yesterday, a vote of confidence in chairman and chief executive officer Masayoshi Son’s ambitions to ramp up investments in artificial intelligence (AI) and semiconductors.
The Japanese tech investor is gaining investor attention as its telecom arm moves aggressively to invest in generative AI, tying up with Microsoft Corp and start-up Perplexity AI Inc and building data centers stocked with Nvidia Corp accelerators.
Softbank’s chip unit Arm Holdings PLC is also trying to position its architecture as a means to conserve energy in devices running AI.
Photo: Toru Hanai, Bloomberg
The rally is a vindication for Softbank founder Son, whose reputation has been tarnished by big start-up bets that cost the company billions of dollars in recent years. The company’s close ties with Nvidia and OpenAI have strengthened its position amid a global race to build AI-related infrastructure.
Shares of Softbank got a lift in part because the benchmark Nikkei 225’s recovery is expected to help the investment firm’s earnings, according to Tomoaki Kawasaki, a senior analyst at Iwaicosmo Securities Co. “It’s getting another boost as more investors see it as a semiconductor-related stock,” he said.
A darling of retail investors, Softbank shares remain volatile. During the dot-com boom and bust, the company lost 99 percent of its market capitalization, erasing US$70 billion of Son’s wealth.
The company regained ground through two decades of effort rolling out broadband networks in Japan, selling the country’s first Apple Inc iPhones and investments in some of the world’s biggest start-ups.
But its shares plunged again in 2021 in the wake of Beijing’s crackdown on tech firms and a flurry of missteps including investments in start-ups such as WeWork, Katerra Inc, OneWeb Ltd and Zume Pizza Inc.
The share rise has also lifted Son’s rhetoric, with the billionaire making more grandiose pronouncements about the future of AI. Recently, he told shareholders he was preparing to swing for the fences, in a move that will make his previous bets seem like “warmups.”
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