SoftBank beats Q1 profit estimates on $8.2B Intel stake gain

SoftBank Group posted Q1 net profit of ¥347.3 billion, beating the ¥120.23 billion consensus on a ¥1.3 trillion gain from its Intel stake.

The investment division, which holds the chipmaker stake, booked segment profit of ¥1.05 trillion, the company said in its earnings release Thursday. The ¥1.3 trillion gain on SoftBank's roughly $2 billion Intel investment, announced last year, helped offset a nearly 18 percent year-on-year decline in net profit. Revenue for the quarter was not yet disclosed.

The Vision Funds, which house investments spanning OpenAI to TikTok-owner ByteDance, booked a $1.7 billion gain in the quarter, driven by a $2.2 billion increase in the value of SoftBank's stake in ByteDance, offsetting declines in companies like PayPay. The gain marks a reversal for the Vision Fund division, which absorbed billions in writedowns during the tech valuation reset.

The results arrive after a turbulent setup. SoftBank had beaten estimates for three straight quarters yet saw its shares decline each time, a pattern analysts flagged as "beat and drop." Deutsche Bank downgraded the stock to Hold from Buy ahead of the report, citing limited upside after a sharp rally and yen depreciation dynamics. Arm Holdings, in which SoftBank owns roughly 90 percent, warned last week that smartphone royalties will fall in coming quarters, weighing on the crown jewel of Son's portfolio. A technical "dead cross" formed on Arm's chart July 28, with the 25-day moving average crossing below the 75-day average, adding pressure.

The beat gives Masayoshi Son's investment empire room to maneuver as it navigates a portfolio spanning OpenAI, ByteDance and Arm. Full-year FY2026 EPS came in at ¥873.51 versus ¥642.20 estimated, but the forward FY2027 consensus drops sharply to ¥109.30, reflecting expectations that extraordinary portfolio gains will normalize. The DigitalBridge acquisition close adds a new digital infrastructure leg to the portfolio. Investors will watch whether the Intel windfall marks the start of sustained portfolio recovery or a one-time paper gain, with the stock's reaction to the report the first test.

This article is for informational purposes only and does not constitute investment advice.