Due to the continuous decline in the value of its Vision Fund investment portfolio and recording investment losses for five consecutive quarters, Japan's SoftBank Group has suffered losses for the past two years. It has been forced to sell its Alibaba shares to strengthen its balance sheet.
However, with the rebound in the tech stock portfolio held by the Vision Fund, analysts believe SoftBank is expected to announce a return to profit when it releases its quarterly financial report on Tuesday. According to the average forecast compiled by four analysts at Refinitiv, SoftBank is expected to achieve a net profit of 75 billion yen ($525 million) for April to June.
Returning to profitability could relieve the pressure on SoftBank's founder and CEO, Masayoshi Son. Prior to this, Son's significant investments in late-stage startups had performed poorly, dragging SoftBank down.
Additionally, investors are closely watching the latest news regarding the potential rise of the chip design company Arm. If the company's rise is successful, it would provide further cash flow for SoftBank and enhance Son's reputation as a visionary investor in the technology sector. Rolf Bulk, an analyst at New Street Research, mentioned that considering Arm's crucial role in the semiconductor industry, its success in going public is extremely important not only for SoftBank but for the entire technology industry.
Expectations that investments in artificial intelligence will drive industry growth have already pushed the market value of chipmaker Nvidia over $1 trillion. Analysts are enthusiastic about Arm's expansion prospects in data centers and the automotive sector. According to Macquarie analyst Paul Golding, given the rising valuations of industry peers, Arm's book value could increase by $31.4 billion.
In June this year, Masayoshi Son stated that due to the rapid development of artificial intelligence (AI), SoftBank's strategy would shift to "offensive mode." Recent activities of SoftBank include establishing new joint ventures, building automated warehouses, and investing in insurtech company Tracnable. Analysts anticipate that, led by the AI-driven tech wave, SoftBank and its Vision Fund are expected to reverse their downturn of the past two years.
