---
endpoint: analytics
pattern: Telecoms
status: done
latency_ms: 207703
conversation_id: 1aae7112-44ab-4a63-886c-a47dc128d324
citations: 10
created: 2026-05-31 19:13:30Z
---

# What is the investment thesis for Softbank Group in the current market environment?

# SoftBank Group (9984 JP) — Investment Thesis in the Current Market Environment

**As of 31-May-2026 | Latest internal coverage: CLSA 27-Jun-2025 (HC O-PF, ¥10,749 TP) | Latest external print: FY26 results 13-May-2026**

SoftBank Group has transformed from a diversified tech holdco into what is effectively an **OpenAI/Arm/ASI platform proxy**. The current bull thesis hinges on Masayoshi Son's pivot to make SBG the world's leading platform for "Artificial Super Intelligence" (ASI) by 2030, with three pillars — OpenAI ownership, Arm + AI silicon (Ampere/Graphcore), and the $500bn Stargate AI infrastructure build-out. The bear case is concentration risk and balance-sheet stretch from financing the OpenAI commitments [1][2][16].

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## 1. The Core Thesis: SOTP Discount + OpenAI Proxy

CLSA frames the bull case as a sum-of-the-parts trade: valuation is now "very focused on SoftBank Vision Fund, ARM and Softbank Corp. We value the company on a SOTP basis, adding up our assumed values for SVF, ARM and other assets then deducting net debt. Our overall SOTP target represents a 30% discount to NAV" [2].

**Key valuation anchors** (CLSA SOTP target ¥10,749):
- **30% discount to NAV** (vs >50% market-implied) [3][7]
- **Arm at US$131bn** market cap assumed (90%-owned by SBG) [3]
- **SoftBank Corp.** (9434) at CLSA's standalone TP, less ¥0.5tn asset-backed finance [3]
- **Vision Fund** equity portion with discounts on privates [3]
- **Adjusted parent net debt: ¥6.6tn** [3]
- **OpenAI is NOT included** in the base-case TP — pure optionality [1]

Sell-side consensus reflects the bull bias: 75% Buy / 15% Hold / 10% Sell, average target ¥6,970 (~21% upside post-FY26 print). Bernstein initiated 18-May-2026 at Outperform with a ¥8,200 TP, implying 47% upside [14][15].

**The "OpenAI proxy" leg** is the dominant variable. CLSA: "For various reasons, Softbank trades at a large discount to NAV (currently at over 50%). This looks excessive, and 30% would appear to be more reasonable... the discount tends to narrow pre-IPO of significant assets like Alibaba and Arm. We think OpenAI would be a similar story" [7]. The IPO of OpenAI (reportedly targeted at up to $1tn valuation) would convert SBG's ~13% stake into a marked-to-market position worth ~¥20tn vs current carrying value [16].

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## 2. The FY26 Print Validated the Setup

The 13-May-2026 FY results were a blow-out, driven almost entirely by OpenAI write-ups:

| Metric | FY26 Actual | FY25 |
|---|---|---|
| Net income attributable | **¥5.002 trillion** (record) | ¥1.15tn |
| Investment gain | **¥7,286.5bn** | ¥3,701.1bn [10] |
| — of which OpenAI-related | **¥6,730.4bn ($43.9bn)** | — [10] |
| Income before tax | ¥6,134.9bn (+¥4,430bn YoY) | — [10] |
| LTV ratio | **17%** (Mar 2026) | 20.6% (Dec 2025) [16] |

The OpenAI position carries a fair value of **$79.6bn against $34.6bn cumulative cost — $45.0bn cumulative gain** as of FY-end [8]. The IFRS-recognized gain alone (¥6,730bn) is larger than SBG's entire FY25 net profit, illustrating just how OpenAI-centric the P&L has become.

---

## 3. The Three Strategic Pillars

### Pillar 1 — OpenAI: The Centerpiece (Now ~13% ownership)

- **2025 follow-on:** $30bn committed, fully closed (April + December 2025), at $260bn pre-money [9]
- **2026 follow-on:** **Additional $30bn committed Feb-2026 at $730bn pre-money** — split across April/July/October 2026 tranches. Upon completion, cumulative investment reaches **$64.6bn for ~13% stake** [9]
- This makes OpenAI by far the largest single investment in SBG's history

### Pillar 2 — Arm + AI Silicon

CLSA: "If Arm was the first half of developing chips, then the acquisition of Graphcore and Ampere is the second half... it now has 50% market share in cloud via Arm" [6]. Key moves:
- **Ampere acquisition closed 25-Nov-2025 for $6.5bn** — wholly owned [11]
- **New "AI Computing" segment** consolidates Arm + Graphcore + Ampere + other semiconductor subsidiaries [6]
- Arm continues to be a key SOTP anchor — the gap between CLSA's assumed $131bn cap and current ~$167bn is unrealized SOTP upside [7]

### Pillar 3 — Stargate (AI Infrastructure)

"Softbank Group's US$500bn Stargate project is advancing steadily, with the company potentially allocating 20–25% of the budget in the first year. Feasibility studies are under way across more than 100 US sites, and initial negotiations have begun, with Texas likely hosting the first few datacentres" [5]. The compute capacity is the backbone for OpenAI's compute demand, vertically integrating SBG's AI exposure.

### Pillar 4 (Emerging) — Robotics + Cristal

Son flagged a December 2025 start for OpenAI's "Cristal" service and signaled robotics will be a major ASI beneficiary — but details remain thin [contextual: 254262a8 PARAGRAPH].

---

## 4. The Bear Case — Concentration & Balance Sheet Risk

The Street is increasingly cautious despite the headline beat. The 13-May post-earnings reaction was -4% (vs Nikkei -1%), and the stock fell -7% over the week as concerns crystallized [17][15]:

1. **Single-asset concentration.** OpenAI gains drove "almost the entirety" of the ¥6.99tn Vision Fund investment profit [16]. Analysts flag that "competitive threats to OpenAI leaves SoftBank vulnerable" [16][17] — particularly given Anthropic raising at >$900bn valuation and Microsoft having earned $30B from OpenAI services, more than doubling its $13bn investment (signaling commoditization risk).
2. **Internal dissent.** As of 20-May-2026, "Masayoshi Son's steadfast commitment to OpenAI is raising internal concerns at the firm" [13].
3. **Funding stretch.** SBG has tapped enormous bridge facilities — **$40bn bridge facility signed Mar-2026 for OpenAI/Ampere financing**, with $20bn drawn down in April 2026 alone [11]. The April 2025 $15bn bridge was repaid by maturity but the next round is even larger.
4. **Asset monetization to fund commitments.** SBG sold $16.25bn of T-Mobile, $2.74bn of Deutsche Telekom (full exit), and $5.83bn of NVIDIA shares — plus took $11.5bn additional margin loans against Arm and ¥400bn against SoftBank Corp [12]. This is monetizing the safer, liquid holdings to fund the OpenAI bet — increasing concentration further.
5. **Dividend cut.** Final dividend cut 75% to ¥5.50 from ¥22.00 [from 73b2d6c9 earnings release], signaling capital is being preserved for AI capex/investment.

---

## 5. Catalysts & Risk Framework

| Bull Catalysts | Bear Risks |
|---|---|
| OpenAI IPO (cleaner structure, financial disclosure) — re-rates discount to NAV from ~50% toward 30% [4] | OpenAI valuation reset on competitive pressure (Anthropic, Google, Meta in-house) [17] |
| Arm cloud share gains, AI Computing segment monetization [6] | Funding gap if bridge loans cannot be termed out cheaply (rate-sensitive) [11] |
| Stargate buildout milestones (site announcements, customer commitments) [5] | LTV creep back above 25% if asset prices fall [16] |
| Cristal launch (Dec 2025), Robotics commercialization [1] | FX — yen strength compresses USD-denominated NAV when translated |
| Share buyback resumption (¥330bn already executed, ¥500bn authorization closed Aug 2025) | Internal management distraction / governance concerns flagged in May 2026 [13] |

---

## 6. Bottom Line

**SoftBank is no longer a diversified tech investor — it is the most direct listed proxy on whether OpenAI becomes the dominant ASI platform.** The bull thesis is mechanical: a 30% NAV discount (vs >50% today) applied to a SOTP that values Arm + SVF + SoftBank Corp + (eventually) OpenAI yields material upside (CLSA: ¥10,749 TP; Bernstein: ¥8,200) [3][14]. The bear thesis is equally mechanical: SBG is now using bridge loans, margin loans against Arm, and forced sales of T-Mobile/DT/NVDA to fund $94bn+ of OpenAI commitments — a single negative OpenAI revaluation would reverse the entire FY26 P&L print and re-widen the NAV discount [11][12][16].

The thesis works if you believe (a) OpenAI maintains LLM leadership through 2027–2028, (b) an IPO crystallizes the OpenAI carrying value, and (c) Arm continues to monetize the AI silicon cycle. It breaks if competitive pressure forces an OpenAI down-round or delays the IPO timeline.

---

**Sources**
[1] CLSA — Softbank Group HC O-PF (A vision of ASI), 27-Jun-2025 (607962937LinqAlpha.PDF)
[2] CLSA — Softbank Group HC O-PF (A vision of ASI), 27-Jun-2025 — Investment thesis (607962937LinqAlpha.PDF)
[3] CLSA — Softbank Group HC O-PF (AI vision), 04-Jun-2025 — Valuation details (607961216LinqAlpha.PDF)
[4] CLSA — Softbank Group HC O-PF (If OpenAI is worth US$1tn...), 13-Jun-2025 — OpenAI proxy thesis (607961957LinqAlpha.PDF)
[5] CLSA — Softbank Group HC O-PF (AI push), 01-Jun-2025 — Stargate project (607960933LinqAlpha.PDF)
[6] CLSA — Softbank Group HC O-PF (A vision of ASI), 27-Jun-2025 — ASI chips strategy (607962937LinqAlpha.PDF)
[7] CLSA — Softbank Group HC O-PF (A vision of ASI), 27-Jun-2025 — Valuation summary (607962937LinqAlpha.PDF)
[8] SoftBank Group Corp. — Consolidated Financial Report for FY ended March 31, 2026 — OpenAI investment status
[9] SoftBank Group Corp. — FY26 Annual Report — 2026 Follow-on Investments commitment
[10] SoftBank Group Corp. — FY26 Annual Report — Results highlights / investment gains
[11] SoftBank Group Corp. — FY26 Annual Report — Bridge loan financing
[12] SoftBank Group Corp. — FY26 Annual Report — Asset monetization
[13] StreetAccount — Masayoshi Son's OpenAI commitment sparking internal concern at SoftBank, 20-May-2026
[14] StreetAccount — Bernstein initiates 9984.JP at Outperform, ¥8,200 TP, 18-May-2026
[15] StreetAccount — Street Takeaways: SoftBank Group Q4/FY Earnings, 15-May-2026
[16] StreetAccount — SoftBank earnings beholden to OpenAI; LTV ratio fell to 17%, 14-May-2026
[17] StreetAccount — Weekly AI movers: SoftBank -7% on OpenAI competitive threats, 15-May-2026

## Citations

- [8] **SoftBank Group Corp., Q4 2026 Report** · external
- [9] **SoftBank Group Corp., Q4 2026 Report** · external
- [10] **SoftBank Group Corp., Q4 2026 Report** · external
- [11] **SoftBank Group Corp., Q4 2026 Report** · external
- [12] **SoftBank Group Corp., Q4 2026 Report** · external
- [13] **APAC morning themes: Masayoshi Son's OpenAI commitment sparking internal concern at SoftBank** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4687490&_doc_date=2026-05-20&_doc_product=SA>
- [14] **Bernstein initiates 9984.JP, ARM** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4684855&_doc_date=2026-05-18&_doc_product=SA>
- [15] **Street Takeaways - SoftBank Group Q4/FY Earnings** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4681155&_doc_date=2026-05-15&_doc_product=SA>
- [16] **SoftBank earnings beholden to OpenAI; LTV ratio fell to 17%** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4679341&_doc_date=2026-05-14&_doc_product=SA>
- [17] **Weekly AI movers include Ford Motor, Fanuc, and Softbank** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4683802&_doc_date=2026-05-15&_doc_product=SA>

