SoftBank's Investment Arm Drives Quarterly Profit Amid Rising Debt

SoftBank Group has reported its fourth consecutive profitable quarter, with its Vision Funds delivering standout performance. The Japanese technology investment giant is reaping significant benefits from its substantial stake in OpenAI, though its aggressive funding strategy for artificial intelligence bets is concurrently pushing its debt levels higher.

For the three-month period ending in December, SoftBank posted a net profit of 248.59 billion yen, equivalent to $1.62 billion. This result marks a sharp reversal from the same quarter a year earlier, when the conglomerate recorded a loss of 369.2 billion yen.

The primary engine for this turnaround was the Vision Fund investment segment. It generated a profit of 735.49 billion yen, a dramatic improvement over the 309.93 billion yen loss it suffered in the prior-year period. Despite the strong year-over-year gain, the company's overall net profit fell short of market expectations, which analysts had pegged at 336.7 billion yen.

Strategic Moves and Mounting Leverage

To finance its multi-billion dollar investments, SoftBank has employed several financial maneuvers, leading to an increased debt burden.

The company expanded its credit line secured against its holdings in Arm from $13.5 billion to $20 billion. Meanwhile, loans collateralized by shares in its telecommunications subsidiary, SoftBank Corp., rose from 800 billion yen to 1.2 trillion yen.

Between June and December, the group sold T-Mobile shares worth $12.7 billion and completely exited its position in Nvidia. These actions contributed to a climb in the loan-to-value ratio from 16.5% to 20.6% within three months. Over the same period, the company's liquidity shrank to 3.8 trillion yen.

OpenAI Stake and Valuation Surge

SoftBank's commitment to OpenAI now exceeds $30 billion, giving it an approximate 11% ownership stake in the developer of ChatGPT. By the end of December, the unrealized gain on this investment stood at $19.8 billion.

Should investors sell immediately? Or is it worth buying SoftBank?

OpenAI is already pursuing its next funding round, which targets $100 billion. If fully realized, this would value the AI firm at up to $830 billion. Interest in the round extends beyond SoftBank, with Amazon and Nvidia also reportedly involved.

Building an AI and Tech Portfolio

The company is actively expanding its technology footprint through acquisitions. In December, SoftBank agreed to purchase DigitalBridge Group, an asset manager specializing in data centers, for $4 billion including debt.

This followed an October deal to acquire the robotics division of ABB for $5.4 billion. The strategic goal is to merge artificial intelligence capabilities with advanced robotics technology.

Share Price and Supportive Backdrop

Ahead of the quarterly earnings release, SoftBank's stock price advanced by 2.4%. Since the start of the year, shares are up 9.5%, building on a near-doubling of the share price throughout 2025.

The equity received additional support from the electoral victory of Japanese Prime Minister Sanae Takaichi on Sunday. Investors anticipate increased government backing for future-oriented sectors like artificial intelligence and semiconductors. The soaring valuations of key holdings, including Arm Holdings and OpenAI, continue to fuel investor optimism.

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