SoftBank Group (SFTBY) shares have experienced a significant rally following an optimistic update from its telecom subsidiary, SoftBank Corp, which has upgraded its full-year revenue and profit projections.
The positive momentum reflects robust operational performance and increasing investor enthusiasm regarding SoftBank’s investments in artificial intelligence (AI) and semiconductors, particularly its substantial stake in Arm Holdings.
Telecom Unit Fuels Earnings Growth
SoftBank Corp reported record revenue and operating income for the first nine months of fiscal 2025, compelling the parent company to revise its forecasts upward. Revenue is now projected to hit ¥6.95 trillion (approximately $44.5 billion), while operating income is expected to reach ¥1.02 trillion (around $6.5 billion).
Despite a slight decline in subscribers attributed to stricter customer acquisition policies, revenue from SoftBank Corp’s consumer segment increased modestly by 3%. Analysts noted that these improved forecasts are indicative of SoftBank’s careful strategy in balancing subscriber growth with profitability.
Arm Holdings’ Expansion Bolsters SoftBank’s Prospects
Arm Holdings, in which SoftBank holds a significant stake, also played a crucial role in propelling the stock upward. The chip designer announced a record quarterly revenue of $1.2 billion for Q4 2025, largely driven by surging demand for AI applications.
CEO Rene Haas emphasized that the revenue generated from data center royalties more than doubled year-on-year, with Arm aiming to supply nearly half of the CPUs utilized by major cloud service providers by the end of the year, underscoring its pivotal role in enabling the next generation of AI infrastructure.
Investments and Collaborations in AI
SoftBank’s relationship with Arm extends beyond mere ownership. Approximately $200 million of Arm’s licensing revenue in the recent quarter was tied directly to initiatives led by SoftBank, such as the Stargate Project, a collaboration with OpenAI and Oracle focused on developing AI-centric data centers in the United States.
The company has successfully leveraged its stake in Arm to secure financing; it accessed a $5 billion margin loan against Arm shares and an additional $15 billion in loans to finance its investment in OpenAI and the $6.5 billion acquisition of Ampere, a server CPU designer.
Integrating Investments and Operations
SoftBank Group is transitioning from a passive investment entity to an active operator, seamlessly integrating its portfolio assets into a cohesive AI ecosystem. By connecting Arm, Ampere, and its planned investments of up to $30 billion in OpenAI, SoftBank positions itself strategically at both ends of the AI value chain.
This integrated approach allows internal projects to potentially generate revenue for portfolio companies, effectively narrowing the gap between investment returns and operational performance. Analysts propose that this model could create significant synergies that enhance SoftBank’s long-term growth prospects, especially in the realms of AI and cloud computing.
Investor Insights
The surge in SoftBank’s stock price illustrates the market’s confidence in its dual strategy of rigorous telecom operations alongside bold AI investments. With the strong performance of Arm, strategic alliances, and leveraged financing deals, SoftBank is carving out a formidable position in the AI infrastructure landscape as a financially dynamic conglomerate.
As the company advances towards its fiscal objectives, investors are likely to keep a close watch on the interplay between internal AI projects, external partnerships, and overall revenue generation, all of which could continue to bolster investor sentiment and drive share price appreciation.
