SoftBank shares plunge as much as 10% after selling Nvidia stake
Pedestrians wearing protective masks walk past signage for SoftBank Corp. near a store in Tokyo, Japan, on May 15, 2020.
Kiyoshi Ota | Bloomberg | Getty Images
Shares of SoftBank Group plunged as much as 10% Wednesday after the Japanese giant said it had sold its entire stake in U.S. chip giant Nvidia for $5.83 billion. The capital will be used to fund SoftBank’s $22.5 billion investment in ChatGPT parent OpenAI, a person familiar with the matter told CNBC.
Shares of SoftBank Group last traded more than 6% lower.
In its earnings report, SoftBank said it sold 32.1 million Nvidia shares in October. It also trimmed its T-Mobile position, raising $9.17 billion.
“We want to provide a lot of investment opportunities for investors, while we can still maintain financial strength,” said SoftBank’s chief financial officer, Yoshimitsu Goto, during an investor presentation.
While the decision to unload Nvidia shares may have caught some investors off guard, it isn’t SoftBank’s first exit from the U.S. chip heavyweight.
The company’s Vision Fund was an early Nvidia supporter, reportedly building a $4 billion stake in 2017 before fully divesting in January 2019. Despite the latest sale, SoftBank remains closely tied to Nvidia through its broader business interests.
“This is a bullish signal on the theme from SoftBank doubling down and not a bearish sign in our view,” said Dan Ives, global head of technology research at Wedbush Securities.
While OpenAI is central to SoftBank’s GenAI portfolio, hardware remains a priority as well, mostly through its stake in British chip designer Arm, with which SoftBank is co-developing products, said Rolf Bulk, equity research analyst at New Street Research. SoftBank has a controlling stake in U.K-based Arm Holdings, whose chip designs power mobile and AI processors.
Several other tech stocks in the region also declined. Semiconductor testing equipment maker Advantest and Tokyo Electron, a chip production equipment maker, slipped over 2%.
Taiwan’s TSMC, the world’s largest contract chipmaker, fell 0.34%. South Korean memory chip giant SK Hynix was 1.62% lower.
—CNBC’s Dylan Butts and April Roach contributed to this report.
