In a recent announcement, SoftBank disclosed that it has completely divested from its position in Nvidia (NVDA), selling a total of 32.1 million shares in October 2023. This strategic decision generated approximately $5.83 billion, translating to an average sale price of just under $182 per share. Notably, this price is below Monday's closing value of $199.05, highlighting a significant shift in the company's investment strategy amidst fluctuating market conditions.
Alongside the Nvidia sale, SoftBank reported an impressive $9.17 billion in proceeds from its sales of T-Mobile (TMUS) between June and September. Despite Nvidia's shares peaking at a record high of $212 in late October, recent market behavior reflects a cautious sentiment among investors regarding stock valuations and the overall health of the AI trade. This growing wariness is evident, as Nvidia's stock experienced a decline of over 3% in midday trading, outpacing the broader market downturn.
Despite exiting its position in Nvidia, SoftBank remains committed to investing heavily in the AI sector. Earlier this year, the company invested billions into OpenAI, the parent company of ChatGPT, thereby reinforcing its status as the world's most-valuable startup. This investment has significantly influenced SoftBank's recent financial maneuvers, including a commitment of over $22 billion in additional funding to OpenAI last month.
Yoshimitsu Goto, CFO of SoftBank, emphasized the company's ongoing strategy, stating, “We are making large investments in OpenAI.” He further explained that to facilitate such substantial investments, it was necessary for the company to leverage some of its existing assets to raise funds. This approach indicates a strategic pivot for SoftBank, focusing on future growth opportunities in the AI landscape.
As investors navigate the complexities of the current market, concerns surrounding AI stock valuations have been prevalent. Analysts have suggested that shorting the hyperscalers, whose substantial spending has driven business growth and stock prices this year, may become a viable strategy. The term "bubble" has been frequently mentioned in discussions surrounding these stocks, further reflecting the cautious outlook that has emerged in recent weeks.
In summary, while SoftBank has exited its investment in Nvidia, its robust commitment to the AI sector, particularly through its backing of OpenAI, indicates a strategic focus on future opportunities in a rapidly evolving market. Investors will be keenly watching how this will influence SoftBank's direction and the broader AI landscape moving forward.