Masayoshi Son takes action! SoftBank sells all its Nvidia shares, cashing out $5.8 billions to shift towards other AI investments

According to foreign media reports, SoftBank Group completely liquidated its entire holdings in Nvidia (NVDA.O) in October. As founder Masayoshi Son plans to make massive investments and build an AI-centric sphere of influence, the company cashed out approximately $5.8 billion. At the same time, SoftBank announced that it will implement a 4-for-1 stock split on January 1 next year.

As of the end of March, the Tokyo-based company had increased its holdings in Nvidia to about $3 billion. This investment, along with substantial returns from SoftBank's Vision Fund investment division, propelled SoftBank to achieve a net profit of as much as 2.5 trillion yen (approximately $16.2 billion) in the second quarter of the fiscal year ending in September, far exceeding the average market analyst expectation of 418.2 billion yen.

Currently, Masayoshi Son's investment portfolio includes some of the most high-profile companies in the AI sector, including OpenAI and Oracle (ORCL.N). The book gains from these holdings drove SoftBank's share price up by 78% in the three months ending in September, marking its best quarterly performance since the fourth quarter of 2005.

Citi analyst Keiichi Yoneshima pointed out in a research report prior to the earnings release that the number of successful investment recoveries by SoftBank is increasing, "so we have raised our forecasts." He set SoftBank's target share price at 27,100 yen and linked his valuation model to OpenAI's valuation, assuming that the future valuation range of the ChatGPT operator would be between $500 billion and $1 trillion.

The 68-year-old Masayoshi Son is actively betting on the investment boom in AI and the chip industry, while cutting back on investments in other sectors. His ambitions have driven a series of plans, including the Stargate data center project and a proposed $30 billion investment in OpenAI.

Masayoshi Son is also reportedly in talks with companies such as TSMC to discuss participation in the construction of an AI manufacturing center in Arizona with a total investment scale of $1 trillion. In addition, SoftBank also considered acquiring US chip manufacturer Marvell Technology Inc. earlier this year.

Raising funds for new investments will be a major challenge, including the proposed $20 billion investment in OpenAI and the plan to acquire chip design company Ampere Computing LLC for about $6.5 billion. The market continues to be concerned about the high valuations and massive capital expenditures of AI companies, as well as who will ultimately benefit from the large data centers and related infrastructure under construction.

A research report published by financial information platform Finimize on Smartkarma pointed out: "The previous simple logic was that buying SoftBank allowed you to gain exposure to Arm shares and a broader AI and technology layout at a relatively low cost. This strategy has far exceeded expectations—SoftBank's share price has doubled, far outpacing the modest increase in its net asset value (NAV)."

The report also stated: "But now this discount space has basically disappeared, and SoftBank is no longer a low-cost entry point. Therefore, from this perspective, now may be a good time to sell and take profits."