SoftBank’s AI‑driven rally SoftBank Group Corp. saw its shares climb 24% in September, marking the first monthly gain in four months. The surge came after OpenAI unveiled its GPT‑6 Astra model, reigniting enthusiasm for Masayoshi Son’s $65 billion stake in the ChatGPT creator. The tech investor’s stock also benefited from a rebound in its chip unit, Arm Holdings Plc, which posted a 20% gain last month.
Debt and credit risk remain in the background While the equity story looks bright, SoftBank’s credit default swaps (CDS) spiked to the highest level seen since 2023. The rise reflects lingering doubts about AI safety, escalating costs, and intense competition. The company recently raised $11.1 billion through the largest corporate junk‑bond sale on record, but borrowing costs stayed higher than in previous periods.
Arm Holdings lifts the balance sheet Arm, which SoftBank owns almost 90 percent of, is a key driver of confidence. Analysts project that demand for central‑processing units could reach $330 billion by 2030, driven by the growth of agentic AI and general‑purpose computing. Arm’s positive order outlook and share price recovery help cushion SoftBank against credit‑market pressure.
Investor sentiment and valuation SoftBank’s shares trade at a 24 percent discount to net asset value (NAV) as of September 29, exceeding the year‑to‑date average of 20 percent. Bloomberg Intelligence notes that a favourable catalyst could lift the stock’s valuation. However, fund managers like Takumi Nishida prefer to invest directly in AI hardware suppliers, citing fierce competition and rising debt costs.
Outlook and what to watch Analysts expect the upward trend to continue, with a 12‑month target price averaging ¥9,061 (≈$57.21) versus a recent close of ¥6,701. SoftBank’s earnings in the June quarter were buoyed by its stake in Intel Corp., giving the company resilience while awaiting returns from its AI bets. The company’s future moves—such as expanding into data centres and acquiring ABB’s robotics unit—could provide upside regardless of which AI platform wins the race.
SoftBank’s short interest rose to 2.36 percent of float, a new yearly high, signalling that some investors remain cautious. If CDS spreads widen further, the impact of a higher NAV on the share price may be limited. Nonetheless, the stock’s 52 percent gain this year and a majority of buy ratings suggest that many market participants still see upside potential.