Key Points
- Investment firm BTIG initiated coverage of SoftBank with a “Buy” rating.
- The firm highlighted SoftBank’s large stakes in Arm and OpenAI.
- BTIG is particularly optimistic about SoftBank’s focus on “Physical AI” (robotics).
- The report acknowledges risks, including the risk of OpenAI going bankrupt.
The investment firm BTIG is bullish on SoftBank. On Monday, the brokerage initiated coverage of the Japanese investment giant with a “Buy” rating and a price target of 5,400 yen, about 22% above its current price. BTIG believes SoftBank is well-positioned to profit from the intersection of artificial intelligence and robotics.
The analysts at BTIG pointed to SoftBank’s long history of making smart, early bets on major tech trends. The company was an early investor in giants like Alibaba, Yahoo, and the chip designer Arm. This track record gives BTIG confidence that SoftBank’s CEO, Masayoshi Son, knows what he’s doing as he steers the company toward the next big thing.
SoftBank’s current strategy is heavily focused on AI. The company’s significant stake in Arm is a key factor, as Arm’s chip designs are used in everything from smartphones to data centers.
SoftBank has also made a massive $41 billion investment in OpenAI and recently acquired the chipmaker Ampere, giving it a strong foothold in both AI software and hardware.
According to BTIG, what sets SoftBank apart is its focus on what it calls “Physical AI.” This is the combination of artificial intelligence with real-world robotics. The company has created a new robotics unit and is building a portfolio of robotics companies.
Of course, not all of SoftBank’s bets have been winners. The spectacular failure of WeWork is a famous example. However, BTIG argues that the company’s massive, diversified portfolio allows it to absorb these kinds of losses without derailing the whole ship. They also warned that there is a “downside scenario” where OpenAI could go bankrupt, which would be a huge blow to SoftBank.
For now, though, they are betting that Masayoshi Son’s big swing at the AI revolution will pay off.
