Key Points:
- Analysts expect SoftBank to report a net profit of $1.50 billion for the recent quarter.
- The company owns an 11 percent stake in OpenAI, which recently reached an $840 billion valuation.
- Credit rating agencies changed the firm’s outlook to negative due to massive borrowing.
- SoftBank needs to fund another $25 billion in technology and data center investments during 2026.
SoftBank Group expects to report another strong quarterly profit this Wednesday. The Japanese technology investor continues to reap heavy rewards from its massive financial bets on artificial intelligence. Seven financial analysts surveyed expect the company to report a net profit of 236 billion yen, which equals exactly $1.50 billion, for the January to March quarter. While the exact earnings often swing wildly from quarter to quarter, the core driver of this recent financial success comes directly from the creators of ChatGPT.
The all-in strategy on OpenAI looks incredibly lucrative right now. During the latest funding round in February, the valuation of the artificial intelligence startup skyrocketed to an astonishing $840 billion. Financial expert Krish Sankar estimates that SoftBank holds an 11 percent stake in the startup. This specific slice of the company was valued at $54.4 billion at the end of December. By the end of March, the value of that same stake jumped to a massive $80 billion.
SoftBank refuses to slow down its spending spree. Sankar wrote a note to investors detailing how the Japanese firm plans to pour another $30 billion into the ChatGPT creator throughout 2026. This aggressive timeline aligns perfectly with OpenAI’s upcoming initial public offering. Market insiders expect the startup to list on public stock exchanges in late 2026 or early 2027. If that public listing goes smoothly, SoftBank could see its profit numbers multiply rapidly.
Despite the glowing profit estimates, serious warning signs flash across the financial sector. Analysts worry that SoftBank might soon hit the absolute limit of what it can actually finance. Placing so much money into a single private company makes many investors extremely nervous. Market watchers draw heavy comparisons to WeWork. SoftBank bankrolled the shared office provider with billions of dollars before the startup famously went bankrupt.
Atul Goyal, an analyst at Jefferies, pointed out a troubling trend in a recent note. He pointed out that SoftBank provided almost all the capital during the recent funding rounds for OpenAI. By supplying cash alone, SoftBank artificially props up the startup’s steadily rising valuation. To keep making these massive financial commitments, the Japanese investor has to take on an incredible amount of debt.
This heavy borrowing triggered alarms at major credit agencies. After the massive February funding round, S&P Global Ratings officially revised the credit outlook for SoftBank to negative. The agency judged that the massive, ongoing investments in artificial intelligence will likely damage the firm’s financial capacity and asset liquidity. Lenders simply worry that the company takes on far too much risk at once.
Creditors already show intense hesitation. SoftBank successfully secured a $40 billion bridge loan in March specifically to fund its startup investments. However, media reports from last week revealed that the company had to shrink a proposed margin loan. SoftBank wanted to use its shares in OpenAI to back the new loan, but creditors hesitated to hand over the cash. When banks start pulling back, technology investors face serious liquidity problems.
Looking ahead, SoftBank desperately needs to find more cash. The company has a further $25 billion in required investments to fund before the end of 2026. Sankar estimates that the firm needs $16 billion just for Stargate data center developments. On top of that, SoftBank needs another $9 billion to finalize the acquisitions of ABB Robotics and DigitalBridge. Analysts naturally want to know where the company will find this mountain of money.
One potential solution surfaced in recent media reports. SoftBank allegedly plans to create a brand-new artificial intelligence and robotics company in the United States. The firm wants to list this new entity on the public stock market as early as this year. SoftBank aims for a $100 billion valuation for this new company. Selling shares in this new venture would generate enough cash to offset the heavy investment debts the firm currently carries. SoftBank executives declined to comment on any of these media rumors.
Even with the heavy debt load, retail stock investors completely support the current vision. SoftBank shares have almost doubled in price since the start of April. The stock price is rapidly approaching the record high of 6,923 yen set by the company last October. Over the past year, SoftBank shares have easily outperformed the largest technology firms in the United States. Buyers clearly believe the artificial intelligence gamble will pay off in the long run.
Market experts see even more room for the stock price to grow. At the end of April, Nomura analyst Daisaku Masuno raised his official share price target for SoftBank to 7,500 yen. He fully backs the lofty ambitions of founder and chief executive Masayoshi Son. Masuno admits the stock has already seen huge gains recently, but he believes the company has several tricks left. He stated that future price increases will occur when the company makes real progress on its internal projects, such as building a proprietary artificial intelligence accelerator.
