SoftBank hits a fresh record as Tokyo bets the OpenAI IPO is finally coming

At a glance:

• SoftBank Group shares hit a record high in Tokyo, driving Japan's Nikkei 225 above 65,000 for the first time.
• The surge is driven by expectations that OpenAI will file for an initial public offering within days, according to recent reports.
• SoftBank has committed a total of $64.6 billion to OpenAI, including a $40 billion bridge loan, and holds approximately a 13% stake.

The Rally and Market Impact

SoftBank Group shares surged to a record high in Tokyo on Monday, significantly lifting the Nikkei 225 above 65,000 for the first time in history. The index finished the morning at 65,254, up 3.02% on the session, as reported by The Japan Times. This milestone caps a strong fortnight for the Japanese investment conglomerate, which has added more than $60 billion to its market value.

The broader market received a tailwind from easing tensions between the United States and Iran, boosting optimism that shipping through the Strait of Hormuz would resume. However, the SoftBank-specific rally has been primarily driven by a single catalyst: growing conviction that OpenAI is on the verge of filing for an initial public offering. This sentiment has propelled SoftBank's stock sharply higher since Thursday.

SoftBank's AI Bet: OpenAI and Arm

SoftBank's rally is closely tied to its substantial investments in two pivotal private companies: OpenAI and Arm. The conglomerate holds roughly a 13% stake in OpenAI, the artificial intelligence research organization behind ChatGPT. Additionally, SoftBank retains a controlling stake in Arm, the British chip designer critical to AI infrastructure. Both positions have seen significant value appreciation recently.

In terms of financials, SoftBank invested $32.4 billion in OpenAI during the fiscal year that ended in March, as disclosed by CFO Yoshimitsu Goto. A further $30 billion in follow-on investment has been committed, with $10 billion funded in April. By October, the cumulative investment will reach $64.6 billion, underwritten by a $40 billion bridge loan from a syndicate that has grown to eight banks. Meanwhile, Arm rose more than 16% on Thursday alone, following a 15% gain the previous day, spurred by Nvidia's earnings beat and signals that hyperscaler spending on AI infrastructure remains robust.

Financials and Valuation

SoftBank's financial performance has been stellar, buoyed by these AI bets. The company booked roughly $45.7 billion in cumulative investment gains in fiscal 2025, helping it post a net income of $31.4 billion. Goto noted that this represents the highest profit ever recorded by a Japanese corporation. However, most of this value is currently on paper as marks, not cash; the anticipated IPO is seen as the event that could convert these marks into realized gains.

The company's net asset value (NAV) was around $300 billion in mid-May, but it swings significantly with movements in Arm and OpenAI on any given week. Historically, holding companies like SoftBank trade at a discount to the underlying value of their assets, and SoftBank has often traded at one of the wider discounts. This discount reflects market skepticism about the liquidity and realization of private market valuations.

Skepticism and Analyst Views

Despite the rally, there are reasons for caution. The market is aware that SoftBank's high valuation is predicated on the successful IPO of OpenAI and the sustained growth of Arm. Some of OpenAI's own investors have flagged a gap between the firm's revenue line and its $852 billion private valuation, raising questions about the sustainability of such high multiples. Reports that OpenAI fell short of its internal revenue and user-growth estimates have not derailed the rally but linger as a potential overhang.

Analyst sentiment is mixed but leans bullish. Of the 12 analysts who cover SoftBank stock, eight rate it a strong buy, three a hold, and one a strong sell, with an average price target slightly below the current trading level. The asymmetry for the next six months is procedural: the date of the IPO filing, the price range, and the eventual first-day trading performance will be key determinants of whether the rally can be sustained.

Implications and What's Next

Masayoshi Son, SoftBank's founder and CEO, has spent much of the past year arguing that OpenAI represents the most important technology shift of the century. Monday's stock surge marks the first time the public market has agreed with him at this scale, validating his long-term vision for AI. The IPO, if it lands as advertised, could be a watershed moment for both SoftBank and the broader AI investment landscape.

Looking ahead, all eyes are on OpenAI's IPO filing timeline. Reports suggest a confidential filing could come as soon as the end of last week, with an autumn debut targeted. For SoftBank, the successful conversion of its massive paper gains into cash could further bolster its financial position and enable new investments. However, the market will also watch for any signs of overvaluation or execution risks as the process unfolds.