SoftBank Group's stock has entered a technical danger zone, with the daily chart flashing a death cross as the company's marquee investments stumble. The Japanese conglomerate's shares have fallen to their lowest level since April, now trading around ¥3,550, a sharp decline from the year's high of ¥9,063. This 61% drop from the all-time peak underscores the mounting pressure on Masayoshi Son's investment empire.
Portfolio companies under pressure
The core of SoftBank's troubles lies in its portfolio. The most significant concern is OpenAI, where SoftBank has poured over $64 billion, largely financed through borrowing. While the investment appears profitable on paper—OpenAI recently raised $11 billion at a $1.25 trillion valuation—the reality is more precarious. The valuation came in below the $1.4 trillion SoftBank had sought, and the company had aimed to raise $30 billion, not the $11 billion it secured.
There is a real risk that OpenAI's valuation could shrink further when it eventually goes public, likely next year. Recent IPOs, including those of Circle Internet Group and SpaceX, have seen their shares tumble from initial peaks, setting a cautionary precedent.
Arm Holdings and Intel woes
SoftBank's publicly traded holdings are also struggling. Arm Holdings, in which SoftBank owns an 86% stake, has seen its stock plummet from a high of $452 earlier this year to around $174. The decline accelerated after Arm's latest earnings report revealed softer-than-expected smartphone royalties.
Intel, once a success story for SoftBank, has also reversed course. SoftBank invested $2 billion in Intel last year at $23 per share, and the stock surged to $141. However, Intel shares have now fallen to $56.28, near their lowest level since late April, as its PC revenue continues to face pressure.
Earnings outlook and technical signals
These investments had boosted SoftBank's second-quarter profits, with net income reaching ¥347.3 billion ($2.2 billion), beating analyst expectations of ¥120.23 billion. But with the recent declines, those gains are likely to be erased in the upcoming earnings report.
Technically, the death cross—where the 50-day moving average crosses below the 200-day moving average—has formed on SoftBank's daily chart. Historically, this pattern often precedes further downside. Investors are now eyeing the key support level of ¥3,000, and the sell-off could accelerate as earnings approach and AI-related jitters persist.
This article is for informational purposes only and does not constitute financial advice.
