Nvidia Falls 1.4%. SoftBank Sells Its Entire Stake in Nvidia for $5.83 Billion

Nvidia stock fell 1.4% in premarket trading. SoftBank Group Corp. sold its entire stake in Nvidia Corp., pocketing $5.83 billion ahead of a rash of planned investments by founder Masayoshi Son to build his own sphere of influence supporting artificial intelligence.

The Tokyo-based company had raised its stake in Nvidia to about $3 billion by the end of March. That stake and a windfall at the Vision Fund startup investment unit helped SoftBank report a surprise net income of ¥2.5 trillion ($16.2 billion) in its fiscal second quarter, far outrunning the average of analyst estimates of ¥418.2 billion.

On Tuesday, SoftBank also announced a 4-for-1 stock split that will take place Jan. 1.

Son’s company now boasts a portfolio that includes some of the world’s most sought-after names in AI: OpenAI and Oracle Corp. Those stakes boosted SoftBank’s paper gains and helped drive a 78% surge in its share price over the three months ending in September — its best such performance since the December quarter of 2005.

The number of bets from which SoftBank is successfully recouping its investment has increased, “so we raise our forecasts,” Citigroup analyst Keiichi Yoneshima wrote in a note ahead of the earnings release. The analyst set his target price for SoftBank’s stock at ¥27,100, linking his calculations with OpenAI’s valuation and assuming a future valuation range of $500 billion to $1 trillion for the ChatGPT operator.