SoftBank is scheduled to announce its first-quarter earnings on August 6. The market is focused on whether the company can offset the financial burden from its $65 billion investment in OpenAI through performance in its robotics, energy, and semiconductor sectors.
According to Bloomberg on August 5, the key points of this earnings report will be how SoftBank plans to secure funding for its OpenAI investment and whether it can demonstrate tangible progress in AI ventures outside of OpenAI.
In March, SoftBank secured a $40 billion short-term loan to finance its investment in OpenAI. Recently, 21 financial institutions have joined in providing additional loans, but concerns about the growing debt burden persist.
The five-year credit default swap (CDS) premium, which indicates the risk of corporate default, has risen by about 0.7 percentage points this year to 3.5%, the highest level among Japanese companies according to Bloomberg data.
Speculation that OpenAI's initial public offering (IPO) may be delayed is also heightening concerns. A postponed IPO could delay SoftBank's ability to assess the market value of its OpenAI stake or recover its investment.
As a result, investors are closely monitoring the progress of SoftBank's robotics and energy businesses. The company is pursuing a public listing for its energy subsidiary, SB Energy, and a newly established robotics firm, Roze, in the U.S. stock market. A successful listing could clarify the valuations of both businesses.
SoftBank's acquisition of Swiss company ABB's robotics business is also a major point of interest. The company plans to complete the acquisition between mid and late 2026. Once finalized, this will enable the application of AI technology to its industrial robotics business, which already has an established customer base and revenue.
Arm, a semiconductor design firm, is considered a key asset that could alleviate SoftBank's financial burden. SoftBank holds approximately 90% of Arm's shares. Although Arm's stock price surged over 200% in the six months leading up to June, it has recently dropped about 33%. However, analysts believe that its CPU business could serve as a long-term growth driver.
SoftBank's stock price has fallen about 40% since its peak on June 2. Nevertheless, it remains up approximately 19% for the year. According to Bloomberg, there are 16 buy ratings, 6 hold ratings, and 1 sell rating for SoftBank. Analysts have set a 12-month average target price of 8,603 yen, which is about 65% higher than the closing price of 5,228 yen on August 4.
* This article has been translated by AI.
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