SoftBank's Q1 Profit Exceeds Expectations, Driven by Intel Gain, ByteDance Value Rise

SoftBank Exceeds Q1 Profit Forecasts

SoftBank announced a net profit of 347.3 billion Japanese yen ($2.2 billion) for its fiscal first quarter, which concluded in June. This figure exceeded analyst expectations of 120.23 billion yen, though it represented an 18% decline compared to the same period last year.

Intel Investment Drives Significant Gains

A substantial 1.3 trillion yen gain from SoftBank's shares in U.S. chipmaker Intel was a primary contributor to the positive results. SoftBank had invested approximately $2 billion in Intel last year, and Intel's shares have surged nearly 400% over the past 12 months. This gain was recorded in SoftBank's investment division, separate from the Vision Fund, contributing 1.05 trillion yen in segment profit.

Vision Funds Benefited from ByteDance

The Vision Funds, which include investments in companies like OpenAI and ByteDance, saw a $1.7 billion increase in value during the first quarter. This was largely driven by a $2.2 billion rise in the value of SoftBank's stake in Chinese firm ByteDance. This increase helped offset declines in other portfolio companies, such as PayPay.

OpenAI Investment Shows No Q1 Impact

SoftBank stated that it recorded no investment gain or loss from its stake in OpenAI during this quarter. This contrasts with the previous quarter, where OpenAI was a major contributor to the Vision Funds' nearly $20 billion gain. SoftBank has committed to investing over $60 billion in OpenAI, with $55 billion already invested, aiming for approximately 13% ownership.

AI Computing Segment Reports Losses

Despite its focus on artificial intelligence, SoftBank's AI computing segment reported a loss of 200.8 billion yen, wider than the 32.4 billion yen loss in the same quarter last year. This segment includes holdings in chip companies such as Arm, Graphcore, and Ampere. Investors are scrutinizing AI spending and seeking tangible returns on these investments.