SoftBank Group reported a significant increase in profits for the first fiscal quarter of 2023, driven by successful investments in technology companies, particularly in artificial intelligence.
Record Profit for SoftBank
The Japanese technology conglomerate SoftBank Group announced a net profit of 421.8 billion yen ($2.87 billion) for the quarter ending in June. This figure vastly exceeds analysts' expectations of 127.6 billion yen profit. It marks the company’s second consecutive profitable quarter, recovering from a loss of 174.28 billion yen in the same period last year.
Vision Fund Success and AI Bets
At the core of this performance is SoftBank’s Vision Fund, which increased its assets by $4.8 billion during the quarter. The fund, investing in cutting-edge technology firms globally, posted a segment profit of 451.4 billion yen, attributed to improved public and private market valuations of its holdings. Recent gains have primarily come from its aggressive investment in artificial intelligence, notably through companies such as Grab and Swiggy.
Portfolio Challenges and Asset Sales
Despite the strong quarter overall, SoftBank faced losses of 256.55 billion yen related to its non-Vision Fund holdings, particularly due to the sale of shares in T-Mobile and Alibaba. However, part of these losses was offset by profits from semiconductor leader Nvidia, which has seen shares surge amidst the global AI boom. In August, SoftBank announced its sale of approximately 13 million T-Mobile shares for nearly $3 billion to help fund future endeavors.
Overall, SoftBank is demonstrating positive results amid market recovery and a growing interest in investment technologies, although challenges remain that require attention and resolution.
