Shares of Japan’s SoftBank Group are seeing quick gains ahead of a planned initial public offering (IPO) of the technology investor’s chip designer Arm, as investors across the globe rush to add chip and artificial intelligence-related stocks to their portfolios.
Tokyo-listed SoftBank shares jumped more than 4% on Friday, taking total gains since last week’s close to almost 15%.
Still, they are up only 6% year-to-date, compared with 172% for US chipmaker Nvidia – an expected beneficiary of investment in artificial intelligence (AI) – and 39% in the Philadelphia SE Semiconductor Index.
The Japanese conglomerate, whose tech portfolio has slumped in value due to an array of troubled investments, passed the psychological level of 6,000 yen on Friday for the first time since February.
It closed just shy of the level as traders booked weekly profits in the second half of trade.
“We expressed a view that SBG stock will rally ahead of the ARM IPO later in the year… But given [the] market’s fascination for semi-stocks, we think it makes sense to move early,” Jefferies analyst Atul Goyal wrote in a client note, upgrading his recommendation on the stock to “buy”.
SoftBank CEO Masayoshi Son, who has argued that the rise of AI drives his investments, has also been caught up in recent enthusiasm for generative AI, which proponents compare to the arrival of the internet.
“He feels that ‘finally my time has come’,” SoftBank Chief Financial Officer Yoshimitsu Goto told reporters at an earnings briefing last month.
Other beneficiaries of enthusiasm for semiconductor-related stocks included equipment makers Advantest and Tokyo Electron, which have climbed 109% and 50% respectively year-to-date.
- Reuters, with additional editing by Vishakha Saxena