SoftBank Surges 12% — Arm and OpenAI Drive Market Cap Boom
By John Nada·May 22, 2026·4 min read
SoftBank shares soar over 12%, buoyed by Arm Holdings' rise and Nvidia's AI momentum. Investors ponder underlying asset valuations.
SoftBank Group shares have surged over 12% on Friday, continuing a scorching rally that began with a 20% rise the previous day. This upswing added over $35 billion to its market cap, stoked by Nvidia's stellar earnings and its ripple effect on AI-related stocks.
Nvidia's results rekindled investor enthusiasm for AI infrastructure, benefiting companies like Arm Holdings. Arm, in which SoftBank holds a majority stake, saw its shares climb more than 16% overnight. This followed a 15% gain in the prior session, CNBC Business reported. With chip designs integral to AI servers and data centers powered by Nvidia systems, Arm is firmly positioned in the AI boom.
UBP's senior equity advisor Vey Sern Ling pointed out that SoftBank's stock reflects these underlying asset surges. However, Ling cautioned against the apparent value, noting a typical investor skepticism toward holding companies like SoftBank. "Net asset value or sum-of-the-parts valuations usually warrant a significant discount," he told CNBC, as shareholders rarely receive full asset value.
SoftBank's stake in OpenAI is another piece of this puzzle. Investing more than $30 billion, SoftBank has become one of the largest backers of the ChatGPT maker. The potential for OpenAI's IPO could unlock further value, though analysts expect limitations on immediate gains.
Nvidia's recent earnings have sparked a renewed interest in companies within the AI sector. This includes those that develop AI infrastructure and data centers, both of which rely heavily on advanced chip designs. Arm Holdings, a key player in this space, has seen significant benefits as a result of this trend. Their technology is pivotal for AI servers, which are increasingly in demand due to the rise of AI applications and services.
The impact of Nvidia's earnings extends beyond just Arm Holdings. It has created a ripple effect that has been felt across multiple sectors, particularly those involved in AI technology. This includes companies like SoftBank, which holds substantial investments in firms like Arm and OpenAI. These investments are central to SoftBank's strategy to capitalize on the growing AI market.
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Despite the strong performance of SoftBank's shares, there are inherent risks associated with investing in holding companies. These risks stem from the fact that the value of the underlying assets may not be fully reflected in the holding company's share price. This is a common issue for holding companies like SoftBank, which often trade at a discount to their net asset value.
The concept of net asset value (NAV) is crucial when evaluating holding companies. It refers to the total value of a company's assets minus its liabilities. In the case of SoftBank, the NAV is influenced by the performance of its investments in companies like Arm and OpenAI. However, as noted by Vey Sern Ling, investors often apply a discount to the NAV of holding companies due to the perceived risk and complexity involved.
OpenAI, known for its groundbreaking work in AI technology, particularly with its ChatGPT product, represents a significant part of SoftBank's investment portfolio. With SoftBank's investment exceeding $30 billion, the Japanese conglomerate has positioned itself as a major player in the AI industry. The potential IPO of OpenAI is highly anticipated and could further enhance SoftBank's market position.
The anticipated IPO of OpenAI is expected to unlock additional value for SoftBank. However, analysts caution that the immediate gains may be limited. This is due to various factors, including market conditions and the potential for increased competition in the AI sector. Despite these challenges, the long-term outlook for OpenAI remains positive, given its leadership position in AI development.
As AI continues to advance, SoftBank's strategic investments in companies like Arm and OpenAI will play a crucial role in shaping the future of the industry. These investments not only support SoftBank's growth but also contribute to the broader momentum within the AI sector. With AI technology becoming increasingly integrated into various industries, the demand for advanced AI infrastructure and solutions is expected to rise.