SoftBank Group Experiences Q2 Profit Recovery
SoftBank Group Corp. Returns to Profitability in Q1 2021, Thanks to Vision Fund's Success
In a remarkable turnaround, SoftBank Group Corp. has reported a consolidated net profit of 421.8 billion yen for the fiscal first quarter, marking a significant improvement from the loss reported in the previous quarter. The profit was primarily driven by a rebound in the performance of the SoftBank Vision Fund.
The Vision Fund, which had reported losses in the previous three fiscal quarters, posted a segment profit of 451.4 billion yen ($2.9 billion) in Q1 2021. This profit is the highest reported by any part of SoftBank Group Corp. in the given context.
The improvement in the Vision Fund's performance can be attributed to several factors. Recovery and gains in Vision Fund investments, driven by improved public and private market valuations of AI and tech startups, played a key role. The fund’s assets rose by $4.8 billion in the quarter.
SoftBank's strategic focus on AI and tech innovation also contributed to the fund's success. Aggressive bets on AI-related companies and infrastructure, including a $30 billion investment in OpenAI and large-scale AI infrastructure projects, soared valuations and investor enthusiasm.
Profit from key portfolio companies and asset sales also boosted the Vision Fund's performance. SoftBank's stake in Nvidia surged 46% in Q1 2025, and previous asset sales such as a $7.8 billion T-Mobile stake monetization helped returns.
One of the companies contributing to the Vision Fund's profit is Coupang Inc., a South Korean e-commerce company. The profit from the core investment business, which excludes the Vision Fund, was 486.9 billion yen, making it the highest reported by SoftBank Group Corp. in the given context.
Despite some volatility and challenges with its investment portfolio, investor sentiment remains positive with many analysts rating SoftBank as a buy. This optimism about AI valuations, coupled with the success of the Vision Fund, strategic asset management, and the core investment business, led to SoftBank’s return to profitability in Q1 2021.
The profit in the April-June quarter followed a loss of 174.2 billion yen in the previous quarter. If we exclude the investment loss of SoftBank Group, the consolidated net profit for the fiscal first quarter would have been 716.9 billion yen. This marks the first profit for the fiscal first quarter in four years for SoftBank Group Corp. The company returned to profitability in the April-June quarter of the fiscal year.
In conclusion, SoftBank Group Corp.'s return to profitability is a testament to the success of its investment strategies, particularly in the tech and AI sectors. The company's aggressive bets on these sectors, combined with strategic asset management, have paid off, setting the stage for continued growth and success in the future.
- SoftBank Group Corp. has reported record profits in the tech sector, chiefly due to the extraordinary success of the Vision Fund, which has shared its earnings through improved public and private market valuations of AI and tech startups across various industries.
- The 2021 Q1 profit of the Vision Fund is primarily credited to significant gains in the fund's investments, particularly in AI-related companies like OpenAI, where SoftBank made a substantial $30 billion investment.
- Investors are encouraged by SoftBank's performance in technology and AI, as strategic asset management and a shift in focus to tech innovation have boosted the Vision Fund's success, driving the company's return to profitability in Q1 2021.
