SoftBank announces unexpected profit of $3.5 billion

SoftBank Group , Masayoshi Son 's conglomerate, posted an unexpected profit of $3.5 billion (€3.15 billion) in its latest quarter, as it prepares to invest tens of billions of dollars in its ambitious bet on artificial intelligence.

The Japanese technology conglomerate announced Tuesday that it posted a net profit of 517.2 billion yen (3.14 billion euros) in its fourth fiscal quarter, driven by gains in its telecommunications portfolios and improved valuations of other key investments.

Fourth-quarter profit was significantly higher than the 231 billion yen reported in the same period last year. It also exceeded analysts' expectations, who had expected a small loss of 26.9 billion yen, according to LSEG data, underscoring the volatility of the business. The quarterly results boosted an annual profit of 1.2 trillion yen, the group's first annual profit in four years.

"The fourth-quarter profit was a positive surprise, but the most important thing remains the lack of clarity around Stargate ," says Kirk Boodry, a SoftBank analyst at Astris Advisory. "There was a real sense of urgency last quarter about Stargate, but that hasn't translated into information yet."

Boodry attributes the unexpected quarterly profit to the revaluation of its stakes in telecom companies , including T-Mobile and Deutsche Telekom , as well as Alibaba shares and its portfolio of private companies.

The group posted a 177 billion yen profit on its tech-heavy Vision Fund, thanks to contributions from South Korean e-commerce group Coupang and TikTok owner ByteDance. The Vision Fund posted a 352 billion yen loss in the last quarter.

The results come at a critical time for SoftBank, which is investing heavily in artificial intelligence, including up to $30 billion in OpenAI and an initial $100 billion investment in its Stargate AI joint venture.

Stargate involves the large-scale construction of data centers , primarily in the US, funded through project financing and in partnership with OpenAI, as well as other groups such as Oracle, Microsoft, and Nvidia.

Chief Financial Officer Yoshimitsu Goto said Tuesday that several sites in Texas are being prepared for the project's launch, and that the company is conducting due diligence on more than 100 potential sites in the U.S.

Analysts have asked for more information, and Boodry says he expected to know by now who was funding the initial projects.

Goto, however, denies reports that banks are hesitant to fund the project due to tariffs or the threat of cheaper AI models from China, and says SoftBank is "making progress and taking good steps" in that direction.

The moves are part of Son's grand strategy for AI, which he believes is on the cusp of ushering in a new economic and social revolution.

The group is planning its future around AI chips, robotics, data centers, and power generation , trying to build a system that spans everything from processing power to AI models and applications.

SoftBank said Tuesday it would consolidate its robotics businesses under a single entity. In March, it announced its $6.5 billion acquisition of Ampere , a company Goto says has "specific expertise in semiconductor design."

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