Driven by the soaring stock price of its chip company Arm, SoftBank Group's stock price has reached a new high in recent years.
On February 13th, SoftBank Group opened nearly 10% higher and surged for the third consecutive day. As of the close, it closed at 8492 yen, up 6.27%. SoftBank Group's stock price also reached its highest level since May 2021.
According to the latest quarterly financial report data, Sun Zhengyi holds 29.02% of SoftBank Group's shares, nearly 426.7 million shares. With SoftBank Group's stock price rising for three consecutive trading days, Sun Zhengyi's personal wealth increased by 5.35 billion US dollars in just three days.
Under the wave of AI, the stock prices of American chip companies continue to soar. After a 40% surge in stock prices last Friday, Arm's US stock market closed up another 29.3% on Monday, closing at $148.970.
It is worth noting that Arm's stock price has risen this time, starting with Arm's strong third quarter (October December) performance and explaining in its financial report how to benefit from the AI wave.
After trading on February 7th, Arm released financial reports showing that its revenue, operating profit, and performance guidance all exceeded expectations. According to the financial report, Arm's adjusted operating profit for the third quarter was 338 million US dollars, with an expected increase of 274.4 million US dollars; Total revenue of 824 million US dollars, expected to be 760 million US dollars; Expected revenue for the current fiscal quarter is between 850 million and 900 million US dollars, with an expected revenue of 778.5 million US dollars; The adjusted earnings per share for the entire fiscal year are expected to increase to $1.20-1.24.
Arm stated in its financial report that the company is expanding from traditional smartphone technology to new markets such as artificial intelligence applications. According to mainstream media reports, SoftBank founder Sun Zhengyi has promised to explore ways to promote the adoption of Arm architecture chips by invested companies when seeking investment in artificial intelligence.
Stimulated by performance and expectations, Arm surged 42% after trading, and its stock price surged 93% from February 8th to the close of February 12th for three trading days.
In a report published on Smartkarma, independent analyst Victor Galliano wrote, "Without a doubt, Arm is a high growth stock that deserves a premium valuation."
After consecutive days of gains, Arm's latest market value has reached $153.2 billion, significantly narrowing the gap with Intel's market value. Currently, Intel's market value is approximately $186 billion. When Arm went public in September last year, its market value was only $65.248 billion.
Public information shows that Arm is one of the most important companies in the global technology field. According to official website data, 95% of smartphones worldwide, including Apple iPhone and Android, adopt Arm architecture.
Although Arm has been listed, only a small portion of its stocks can be traded in the market, with SoftBank Group holding a whopping 90.6% stake. Meanwhile, Arm has become the most dazzling gem in SoftBank Group's assets. According to the financial report, as of December 31, 2023, Arm's equity value accounted for 32% of SoftBank Group's net assets, making it the largest single asset in SoftBank Group's investment portfolio.
Victor Galliano cautioned in the report, "Our main concern is that it now appears to be a stock that is' growing at any price ', and this situation may derail due to disappointing profits. SoftBank Group's increasing reliance on Arm is a risk, as we believe its ultra-high valuation is unsustainable.".
In addition, driven by the stock price of SoftBank Group, the Nikkei 225 index opened higher on February 13th, breaking through 38000 points during trading and continuing to reach a new high in nearly 34 years since 1990. As of the close, the index closed at 37963.97 points, a surge of over 1000 points from the previous trading day, an increase of 2.89%, and an intraday increase of over 3%.
It is worth noting that on February 8th, SoftBank Group also released a report for the third quarter of 2023 (October December) that exceeded expectations. According to the financial report, SoftBank Group's net profit in the third quarter of last year was 950 billion yen (6.4 billion US dollars), with a loss of 783 billion yen in the same period last year.
The profit level of SoftBank Group is more than twice the market expectation of 373 billion yen (approximately 2.5 billion US dollars), which is also the first quarterly profit achieved by SoftBank Group since September 2022.