SoftBank Group shares dropped 4.41% on Thursday even as the company reported net income of 347.3 billion yen for the quarter, roughly triple the 120.23 billion yen analysts had expected. The decline came despite a massive gain on Intel shares and a $2.2 billion boost from ByteDance's valuation.
Profit beat overshadowed by segment losses
Net sales rose 10.9% to 2,019.6 billion yen. The investment holding arm posted segment income of 1,051.6 billion yen, reversing a 20.9 billion yen loss a year earlier. Total investment gains reached 1,859.4 billion yen for the quarter. But the Vision Funds segment income fell 98.8% year-on-year to just 5.4 billion yen, and the AI Computing segment, which houses Arm, deepened its loss to 200.8 billion yen due to higher expenses at Arm, Graphcore, and Ampere.
Intel and ByteDance gains drive the quarter
SoftBank booked a 1,332.9 billion yen gain on its Intel shares during the quarter. Intel stock climbed from $44.13 to $139.63 over the period. Separately, the investment gain was driven by a $2.2 billion (¥358,000 million) increase in the fair value of ByteDance. SoftBank recorded no gain or loss on its OpenAI stake this quarter; the valuation held flat.
Massive OpenAI bet ahead
SoftBank invested $10 billion in OpenAI in April and another $10 billion in July. The company expects cumulative investment in OpenAI to reach $64.6 billion by October 2026, representing approximately 13% ownership. That level of commitment signals a long-term bet on artificial intelligence, even as the AI Computing segment currently bleeds cash.
The market's reaction suggests investors are focused on the losses in the AI Computing and Vision Funds rather than the headline profit beat. SoftBank's next quarterly report, due in three months, will show whether the OpenAI investments start generating returns or continue to weigh on the balance sheet.
