SoftBank Group Shares Surge 20%. Nvidia and OpenAI Are the Drivers Behind It.

NVIDIA's earnings report released on May 20 shows that AI capital expenditure has not cooled down. The company reported revenue of $81.6 billion for the first quarter of fiscal 2027 ending April 26, up 85% year-over-year; data center revenue reached $75.2 billion, up 92% year-over-year, and the company provided second-quarter revenue guidance of $91 billion, continuing to exceed market expectations. Jensen Huang stated that AI infrastructure build-out is accelerating and emphasized that agentic AI is starting to create real value.

Following the earnings release, NVIDIA's stock price edged down 1.26% in after-hours trading, but the report was sufficient to demonstrate the resilience of AI demand.

This is particularly important for SoftBank, as it has made a heavy bet on AI giant OpenAI. OpenAI's valuation and funding environment, in turn, depend largely on market confidence in the entire AI value chain. Strong earnings from NVIDIA signify that demand for AI computing power is still expanding, which will bolster market belief that model and application companies like OpenAI still have significant growth potential.

SoftBank's latest earnings report shows that investment gains for fiscal year 2025 surged 97% to 7.29 trillion yen, with investment gains from OpenAI reaching 6.73 trillion yen, or 92.3%; SoftBank plans to inject capital in three phases in 2026, raising its cumulative investment to approximately $64.6 billion and further increasing its stake from 11% to about 13%.

To this end, SoftBank has already sold a portion of its T-Mobile ( TMUS) and Nvidia holdings, issued bonds, and tapped a $40 billion bridge loan, $20 billion of which was drawn in April, primarily for its OpenAI investment.

Meanwhile, the latest reports indicate that OpenAI is preparing to file a confidential IPO application within the coming weeks, with a potential listing as early as September 2026, targeting a fundraising goal of at least $60 billion at a valuation that could approach $1 trillion; the company also recently cleared a major legal hurdle, and its user base has reached 900 million weekly active users and 50 million paid subscribers. This implies that once OpenAI goes public, SoftBank, as a major shareholder, will naturally be among the first to benefit.

As NVIDIA’s earnings continue to validate AI investment and OpenAI approaches its IPO, SoftBank’s balance sheet and equity portfolio are being rerated by the market, which is the fundamental driver behind the stock’s sharp rally.

However, this rally also carries evident fragility. According to Reuters, SoftBank’s heavy bet on OpenAI has triggered market concerns over financing pressure and valuation volatility; meanwhile, OpenAI is facing competition from rivals such as Google’s Gemini and Anthropic’s Claude.

NVIDIA’s earnings and the OpenAI IPO are indeed enough to propel SoftBank to a higher valuation, but they also leave the company more deeply exposed to the volatility of the AI narrative. As long as OpenAI’s valuation continues to climb and NVIDIA’s validation of AI demand remains intact, there is still room for SoftBank to be rerated; however, should the IPO pricing fall short of expectations or NVIDIA’s next guidance prove slightly conservative, this high beta will conversely amplify any retracement.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.