Shares of SoftBank Group (SFTBY), a Japanese tech investment firm, jumped nearly 20% on Thursday after OpenAI announced plans for its initial public offering (IPO). The ChatGPT maker is working with Goldman Sachs (GS) and Morgan Stanley (MS) on a draft IPO prospectus that could come as early as this week. The news sent SoftBank stock surging above $19, reversing losses from recent sessions amid broader weakness in U.S. tech markets.
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SoftBank’s AI Bet Boosts Stock
SoftBank holds roughly 11% of OpenAI’s shares, per its own press releases, making it one of the ChatGPT maker’s largest backers. The firm’s stake in OpenAI directly contributed to the stock’s value increase, as news of a potential IPO boosted investor sentiment.
Notably, SoftBank reported record annual profit last week, driven largely by valuation gains tied to its OpenAI holdings. Nearly all of the $20 billion gain recorded by its Vision Fund, a venture capital arm, also came from OpenAI alone in its most recent quarter. A successful IPO could further boost the value of SoftBank’s stake.
SB Energy IPO Adds to SFTBY Stock Rally
SB Energy, a SoftBank-backed firm that builds power and data center infrastructure for AI projects, also filed for a U.S. IPO this week. The development gave SoftBank’s stock a second boost, as investors grew more confident in the company’s AI portfolio.
SB Energy has also partnered with OpenAI under the Stargate initiative to develop next-generation AI and energy infrastructure across the U.S. The two IPO filings on the same day signaled that SoftBank’s AI bets are moving closer to paying off.
Is SoftBank Stock Worth Buying?
According to TipRanks data, SoftBank (SFTBY) currently carries a Hold rating based on TD Cowen analyst Krish Sankar’s review, who assigned the rating earlier this May. The stock has a 12-month price projection of $20, implying an upside of just 2.35% from current levels. For more information on this stock, investors can track its ratings, price targets, and performance metrics on the TipRanks Stocks Comparison Center.
