The recent rally is a validation for SoftBank founder Masayoshi Son, who has faced criticism for costly startup investments in recent years. SoftBank's close ties with Nvidia and OpenAI have bolstered the company's position in the global race to build AI-related infrastructure. Despite being a favorite among retail investors, SoftBank shares remain volatile, having lost 99% of its market capitalization during the dot-com boom and bust, and plunging again in 2021 due to Beijing's tech crackdown and investment missteps.
Key takeaways:
- SoftBank Group Corp. shares traded above the company’s lifetime closing high for the first time in three years, driven by a global surge in AI and chip investment.
- The Japanese tech investor is gaining investor attention as its telecom arm moves aggressively to invest in generative AI, partnering with Microsoft Corp. and startup Perplexity AI Inc., while winning government subsidies to help it build data centers stocked with Nvidia Corp. accelerators.
- On Wednesday, SoftBank surpassed a previous record-high closing price it hit in March 2021, a vindication for SoftBank founder Masayoshi Son, whose reputation has been tarnished by big startup bets that cost the company billions of dollars in recent years.
- Despite the recent success, SoftBank shares remain volatile, having lost 99% of its market capitalization during the dot-com boom and bust, and plunging again in 2021 in the wake of Beijing’s crackdown on tech firms and a flurry of missteps including investments in startups such as WeWork Inc., Katerra Inc., OneWeb Ltd. and Zume Pizza Inc.