SoftBank Q1 profit doubles estimates on Intel gains

SoftBank Group reported fiscal first-quarter net income of ¥347.3 billion ($2.2 billion) on Thursday, down 18% year-on-year but more than double the analyst consensus estimate of roughly ¥166 billion, powered by an ¥1.33 trillion gain on its stake in Intel ↘ 1.02%.moneycontrol+1

The Japanese tech conglomerate also disclosed it had secured a $10 billion margin loan backed by its OpenAI stake, arranged with Goldman Sachs The Goldman Sachs Group, Inc. ↘ 1.38%, JPMorgan Chase ↘ 0.73%, Mizuho, Apollo, and Sumitomo Mitsui Banking, with plans to draw down the facility this month.bloomberg

Intel Windfall Drives the Quarter

SoftBank recorded total investment gains of ¥1.86 trillion in the three months to June 30, up nearly 300% from a year earlier. The bulk came from Intel, where CEO Masayoshi Son's ally Lip-Bu Tan is leading a turnaround. SoftBank invested $2 billion in the chipmaker in mid-2025 at roughly $23 per share; Intel's stock more than tripled during the quarter as its foundry business gained traction, including reportedly landing Apple ↘ 0.80% as a major customer.investing+2

The Intel gains helped offset a flat valuation for OpenAI, which remained at a fair value of $89.6 billion as of June 30, unchanged from end-March. The Vision Fund portfolio contributed ¥460.1 billion in investment income but saw declines in some holdings, including newly listed payments app PayPay.tradingkey+1

Mounting Leverage for AI Ambitions

Son's all-in AI strategy is straining SoftBank's balance sheet. The company's cumulative investment in OpenAI is set to reach $64.6 billion by October after further tranches in the second half of 2026. To finance these commitments, SoftBank has assembled a $40 billion bridge loan expiring in March 2027, a $20 billion margin loan collateralized by Arm Holdings ↘ 0.19% shares, and now the $10 billion OpenAI-backed facility.freemalaysiatoday+3

Beyond OpenAI, SoftBank has committed $5.4 billion to acquire ABB's robotics business and $3.1 billion for digital infrastructure investor DigitalBridge in the second half.reuters

Market Skepticism Persists

Despite recording a record net asset value of ¥72.3 trillion at quarter-end, SoftBank's shares fell after the results, reflecting concerns over concentrated bets and leverage. The company briefly became Japan's most valuable listed firm in June but has since retraced more than half its 2026 gains as OpenAI's IPO — which could provide an exit or collateral repricing — appears likely to slip into 2027.investing+2

"Debate around frontier-model value has intensified, and OpenAI-related financing remains unresolved," BTIG analyst Jesse Sobelson wrote ahead of the results.moneycontrol