SoftBank Group SFTBF SFTBY has made a significant financial turnaround, reporting a profit of $7.8 billion in its latest quarter, largely attributed to successful Indian IPOs and improved tech valuations.
What Happened: The Japanese conglomerate’s profit in the quarter ending September starkly contrasts the $6.05 billion loss in the same period last year, reported the Financial Times.
The Vision Fund, known for its high-risk, tech-heavy investments, contributed to this turnaround with a $3.95 billion profit. This is the first time in nine quarters that the Vision Fund’s cumulative investment gains have turned positive.
Notable IPOs in India, including those of Ola Electric and FirstCry, have significantly boosted SoftBank’s valuations. The company’s CFO, Yoshimitsu Goto, highlighted the positive impact of these IPOs, which lifted valuations by $1.7 billion.
Other factors contributing to SoftBank’s improved financial position include valuation gains at Coupang in South Korea and DiDi in China, as well as a favorable impact on net income from the weak yen.
Why It Matters: SoftBank’s interest in AI has been a recurring theme, with CEO Masayoshi Son predicting the advent of artificial superintelligence within a decade.
More recently, SoftBank has been in the news for its plans to rival Nvidia with its own AI chip production. However, these plans hit a roadblock as negotiations with Intel reportedly fell through. This latest financial success may provide SoftBank with the resources to further pursue its AI ambitions.
In August, SoftBank announced a $3.4 billion share buyback program, following pressure from concerned shareholders.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
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