SoftBank shares surge 19.8% after Nvidia's blockbuster earnings add momentum to the AI sector
SoftBank has invested more than $30 billion in OpenAI, with total investment gains in the company reaching $45 billion
Shares of SoftBank Group skyrocketed on Thursday following blockbuster quarterly earnings from Nvidia, which signalled strong momentum across the artificial intelligence sector and lifted AI-linked stocks throughout Asia.
SoftBank's sharp rally
SoftBank Group shares, which had declined for five consecutive sessions, rebounded sharply to gain 19.8% — adding approximately $35 billion to its market capitalisation in a single day.
The company's fortunes are closely tied to the AI boom through its stake in Arm Holdings, whose chip designs power AI servers and data centres built on Nvidia systems, as well as its significant investment in OpenAI.
SoftBank has committed more than $30 billion to OpenAI, with investment gains in the company totalling $45 billion in the fiscal year ended March.
Last week, the Japanese conglomerate posted a $46 billion annual gain at its Vision Fund, driven largely by the soaring valuation of OpenAI as founder Masayoshi Son continues to double down on artificial intelligence.
The drivers behind the move
Andrew Jackson, head of Japanese equity strategy at Ortus Advisors, told CNBC the rally was being driven by renewed optimism around a potential OpenAI listing, which also helped propel Arm Holdings shares more than 15% higher in US trading hours.
Whilst the developments were largely anticipated by markets, Jackson noted that the magnitude of the move remained significant given SoftBank's heavy exposure to AI-related assets.
Analysts at Fitch Ratings unit CreditSights last week reiterated an "outperform" recommendation on SoftBank Group debt, adding that a sharp rally in Arm Holdings shares had materially strengthened the conglomerate's balance sheet despite its aggressive AI investment strategy.
Broader Asian semiconductor gains
The positive sentiment extended well beyond SoftBank. Asian semiconductor stocks linked to Nvidia's supply chain and the broader technology sector also climbed on Thursday. TSMC rose more than 2%, with Nvidia heavily reliant on the Taiwanese manufacturer for its advanced AI processors.
Japan's Renesas Electronics, a key Nvidia supplier, gained more than 7%, whilst semiconductor equipment maker Tokyo Electron jumped 5.44%. Advantest, a Japanese semiconductor testing equipment maker, rose 2.8%.
SK Hynix, a major provider of high-bandwidth memory chips used by Nvidia, surged more than 8%. Samsung Electronics added 6.7%, further boosted by news that the company and its South Korean labour union had reached a tentative pay agreement, easing fears of an impending industrial dispute.
NVIDIA's record quarter
The gains across the sector followed Nvidia's latest earnings report, which showed revenue surging 85% to $81.62 billion from $44.06 billion a year earlier. The company also announced an $80 billion share repurchase programme and raised its dividend.
