SoftBank Group shares rose sharply in September as equity investors focused increasingly on the potential returns from its artificial intelligence investments, despite growing borrowing costs and concerns in credit markets over the Japanese technology investor’s expanding debt.
SoftBank shares gained 24% in four weeks, recording their first monthly increase in four months, after OpenAI’s new GPT-6 Astra model revived optimism around Masayoshi Son’s $65 billion commitment to the ChatGPT creator. The stock was also supported by OpenAI’s latest plan to raise $30 billion at a $1.4 trillion valuation and by a recovery in shares of SoftBank-owned chip designer Arm Holdings. SoftBank shares were heading for a weekly gain of about 4% in Tokyo on Friday.
The improvement in equities has contrasted with conditions in SoftBank’s credit markets. Credit default swaps on the company have risen to their highest level since 2023 amid concerns about AI safety, rapidly increasing costs and intensifying competition. The divergence has come as Oracle shares have sold off after the company cited force majeure to protect itself from surging data-centre expenses.
“From the equity side, we care a little bit less about the technicality of how they raise money,” said David Dai, a managing director at Sanford C Bernstein in Hong Kong. “Assuming they can raise money, the equity story is actually great because they have got Arm, which is benefiting the most from the rise of agentic AI and server CPU usage.”
Arm has become a central part of the investment case. Arm and other chipmakers are forecasting hundreds of billions of dollars in demand for central processing units by 2030, as users of AI services such as Meta Platforms’ Muse increasingly ask AI agents to execute code and operate web browsers. Dai estimates the market could reach as much as $330 billion and said Arm’s order outlook was positive.
Arm shares, which had fallen by almost half from their June peak, rose about 20% last month. SoftBank owns almost 90% of the chip designer, meaning the recovery has strengthened the value of a major component of its assets and helped ease concerns emerging from credit markets.
Investors are also looking beyond Arm and OpenAI to Son’s broader exposure to artificial intelligence, including robotics, data centres and energy. SoftBank is planning to buy ABB’s robotics unit, while its telecom business is building data centres and offering enterprise services as demand for AI grows in Asia.
“If OpenAI doesn’t do well, sentiment is going to be a lot worse, but they still do own assets in other areas,” said Kirk Boodry, an analyst at Bloomberg Intelligence. “It’s pretty rare to have a stock that is exposed to the global AI boom in that way especially within the Japan context.”
SoftBank shares traded at a 24% discount to their net asset value on September 29, wider than the year-to-date average of 20%, according to Bloomberg Intelligence data. Takumi Nishida, a fund manager at Asset Management One, said there was potential for the shares to be revalued if the right catalyst emerged, noting that SoftBank had previously been discussed as a company that could trade above its net asset value.
Nishida nevertheless said he preferred investing directly in AI hardware suppliers such as memory-chip maker Kioxia Holdings, citing intense competition among AI developers and rising borrowing costs. Other investors have also expressed concern about SoftBank’s debt. The company raised $11.1 billion last month in the largest corporate junk-bond sale on record to finance Son’s AI investments, although its borrowing costs remained largely higher than previously.
Short interest in SoftBank rose to 2.36% of shares available for trading this week, a new high for the year, according to S3 Partners. Han Jiho, an analyst at Sparx Asset Management, said the persistent discount to net asset value suggested that equity investors were pricing in some credit risk. “If CDS spreads continue to widen, further gains in NAV may have a more limited impact on the share price,” he said.
SoftBank shares have gained about 52% this year after recovering from their June decline. In the June quarter, the company recorded a net profit largely because of its stake in Intel, providing additional financial capacity while it awaits returns from OpenAI and other multibillion-dollar AI projects. “If the AI boom ultimately turns out to be a bubble and bursts, the damage could be severe given their leveraged investment,” said Hiroki Takei, a strategist at Resona Holdings.
