Japan’s investment conglomerate SoftBank Group (SFTBY) is preparing for the initial public offering (IPO) of its payment app operator, PayPay, in the U.S. stock market. According to a Reuters report, SoftBank has selected investment bankers, including Goldman Sachs (GS), JPMorgan Chase (JPM), Morgan Stanley (MS), and Mizuho Financial Group (MFG).
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Meanwhile, SFTBY stock closed up 8.8% on August 8 following the Masayoshi Son-led firm’s strong Q1 results. SFTBY shares jumped more than 13% during intraday trading to reach a new 52-week high of $47.40.
Details of PayPay’s Potential IPO
PayPay is majority-owned by SoftBank’s wireless carrier unit, its investment arm Vision Fund, and internet business LY Corp., a joint venture between SoftBank and Naver Corp. PayPay offers mobile payments and financial services such as banking and credit cards. The app has been one of the major forces driving Japanese consumers to shift from cash to online payments by offering generous rebates.
PayPay could raise up to $2 billion in its U.S. stock market debut, and the IPO may happen as soon as the last quarter of 2025, according to sources. However, the amount raised and the IPO timing could change depending on market conditions. PayPay faces intense competition from both domestic and global players, and the fintech company is still reporting bottom-line losses, which could hurt its valuation during the IPO.
If the IPO is successful, it would mark SoftBank’s first U.S. listing of a majority investment since Arm Holdings’ (ARM) blockbuster IPO, which was valued at $54.4 billion in 2023.
SoftBank’s AI Investments Are Paying Off
For the first quarter of fiscal 2025, SoftBank reported a net profit of 421.82 billion yen ($2.87 billion), beating analysts’ expectations and improving significantly from last year’s loss. The strong earnings mainly resulted from SoftBank’s strategic investments in artificial intelligence (AI) companies, such as Nvidia (NVDA) and OpenAI.
Notably, SoftBank has committed $30 billion to the ChatGPT maker and is also leading U.S. President Donald Trump’s $500 billion data center project, called Stargate. Additionally, SoftBank is planning to acquire AI chipmaker Ampere Computing in a $6.5 billion deal.
Is SoftBank Stock a Buy?
SFTBY stock has gained 63.6% so far in 2025, supported by its focus on AI and data center infrastructure projects. The company is making significant bets in the technology space, attracting investor interest. The valuations of SoftBank’s portfolio of technology companies have soared this year, further strengthening its finances.
