Japanese tech investor SoftBank Group is anticipated to report a quarterly profit of 287 billion yen ($1.87 billion) on Tuesday, driven by successful IPOs within its portfolio and a stronger yen.
Analysts are watching closely for signs of renewed investment momentum, supported by SoftBank’s strong balance sheet and management’s optimistic outlook on artificial intelligence (AI).
This profit projection for July-September, based on an average of four analyst estimates compiled by the London Stock Exchange Group , contrasts with a 931 billion yen loss reported in the same quarter last year.
MST analyst David Gibson projects an investment gain of $3.9 billion for the period, with two Indian IPOs — Brainbees Solutions and Ola Electric — expected to contribute $0.9 billion and $1 billion, respectively. A roughly 10% drop in the dollar’s value against the yen is also expected to boost SoftBank’s earnings.
Analysts are especially interested in SoftBank’s upcoming investment strategies, following remarks from CEO Masayoshi Son at a recent investment summit in Saudi Arabia, where he noted plans to reserve tens of billions for future ventures.
SoftBank’s investment pace has been on the rise, with $1.9 billion invested in the April-June quarter, up from $0.3 billion in January-March. In October, SoftBank joined the latest funding round for ChatGPT creator OpenAI.
Analysts are also paying close attention to SoftBank’s efforts in AI chip manufacturing, which could potentially challenge market leader Nvidia. This move may involve collaboration between SoftBank’s chip designer Arm, in which it holds a 90% stake, and recently acquired chip manufacturer Graphcore.
They noted that SoftBank secured a licensing deal with Arm for intellectual property in the latest quarter, generating $43.2 million in revenue, possibly linked to these efforts.
With a solid financial foundation, SoftBank is well-positioned for large-scale investments. Morningstar analyst Dan Baker noted that the company’s balance sheet is “near the strongest it has been in five years.” Both S&P Global Ratings and Japan Credit Rating Agency upgraded SoftBank’s credit ratings earlier this year.
SoftBank’s recent $3.4 billion share buyback, announced three months ago, was below analyst expectations, leaving ample room for further investment opportunities.
