SoftBank Group Corp. has crossed a financial milestone as its controlling stake in Arm Holdings, valued at approximately $165 billion, now exceeds its total net debt of $122.9 billion. This shift changes how investors view the conglomerate's risk profile, especially as the company pursues its aggressive AI-focused investment strategy.
The announcement came after SoftBank released its fiscal 2025 results, which showed a record net profit of $31.4 billion, the highest ever reported by a Japanese company. Yet, despite this impressive figure, the fourth quarter saw an operating loss of $2.88 billion. Gains from the Arm stake and stabilizing valuations within SoftBank’s Vision Fund have reshaped the company's liquidity outlook, leading to an 11.89% increase in its stock price on the Tokyo Stock Exchange, which closed at ¥6,757. This represented a five-day gain of about 25%.
The rally in SoftBank's stock has been fueled by its significant investments in OpenAI. Over the past fiscal year, the company invested $32.4 billion in the AI developer, with an additional commitment of $30 billion planned, including $10 billion already delivered in April. By October 2026, SoftBank's total exposure to OpenAI is expected to reach $64.6 billion, securing a roughly 13% stake. This investment has surged in value, with OpenAI's valuation rising from $150 billion at the end of 2024 to an impressive $730 billion by February 2026. Speculation about a potential $1 trillion IPO has intensified, with market insiders suggesting that OpenAI may file for an SEC listing as early as May, targeting a September 2026 debut. SoftBank alone recorded a $25 billion paper gain on its OpenAI stake in the quarter ending March 2026.
Arm Holdings also played a role in SoftBank's momentum, with its shares climbing 16% following strong earnings from Nvidia and the introduction of a new Arm architecture designed for artificial general intelligence (AGI). SoftBank's telecommunications unit is advancing a healthcare initiative in partnership with Sumitomo Mitsui Financial Group and Fujitsu. This collaboration aims to develop a sovereign cloud-based platform powered by proprietary language models, targeting 60 million users across 4,000 medical facilities, using existing PayPay and LINE ecosystems.
On the portfolio management front, SoftBank is moving forward with asset monetization. The company has confidentially filed a prospectus for a US initial public offering of its renewable energy subsidiary, SB Energy. This timing aligns well with SoftBank's record profit and the positive sentiment surrounding AI-related investments. The firm continues to implement a $6.5 billion share buyback program, having utilized about $4 billion in fiscal 2025. Management has expressed the intention to maintain share repurchases as long as the stock price remains below its estimated net asset value of roughly $300 billion.
Despite the stock's impressive 56% increase over the past 90 days, its trailing price-to-earnings ratio is just 7.7, significantly lower than the sector average of 17.2. Analysts have noted that some models suggest a fair value for the stock at ¥4,498.7, considerably below its recent closing price, indicating that the market is factoring in a potential AI premium. Another evaluation method, using a different earnings base, places the P/E ratio at 10.8x, above the five-year average of 6.8x, reinforcing the idea of a substantial premium.
As SoftBank's stock nears its 52-week high of ¥6,924, just shy of its all-time peak of ¥6,923.8, the relative strength index suggests overbought conditions, which could introduce volatility in the near term. Analyst sentiment remains largely positive, with eight ratings classified as “Strong Buy,” three as “Hold,” and one as “Strong Sell.” However, key factors such as Arm's ongoing market performance and the timing of the anticipated OpenAI IPO are beyond SoftBank's direct control. As competition in AI intensifies, particularly between OpenAI and Anthropic, the stakes for SoftBank’s founder, Masayoshi Son, have risen significantly.
