SoftBank Group shares closed up 4.63% at ¥7,070 on the Tokyo Stock Exchange Monday, extending a five-session rally that has added roughly 40% to the stock’s value and pushed the company’s market capitalization past ¥40 trillion ($252 billion). The gains represent SoftBank’s highest-ever share price, according to Bloomberg.
Three Catalysts Behind the Rally
The surge is powered by a convergence of three factors, according to TradingKey analysis.
First, OpenAI’s confidential S-1 filing with the SEC has made an autumn IPO look increasingly likely. SoftBank holds approximately 13% of OpenAI after investing a cumulative $64.6 billion, with unrealized paper profits of roughly $45 billion, per TradingKey estimates. OpenAI’s public listing could value the company above $1 trillion.
Second, Arm Holdings, in which SoftBank holds a roughly 90% stake, has surged more than 30% since Nvidia reported $81.6 billion in quarterly revenue on May 20. Nvidia disclosed that revenue from Arm-based Vera CPUs is expected to reach $20 billion this year, directly boosting Arm’s growth narrative.
Third, SB Energy Corp., SoftBank’s power infrastructure subsidiary, disclosed plans to file confidentially for a US IPO, adding another potential liquidity event to the portfolio.
Holding Company Discount Compresses
The rally has compressed SoftBank’s long-standing “holding company discount,” the gap between its stock price and the sum value of its holdings. Morgan Stanley noted the discount has fallen from over 50% to approximately 17%, according to TradingKey. UBS estimates SoftBank’s net asset value at approximately ¥42.5 trillion, suggesting a 20% discount is reasonable under current conditions.
For context, Berkshire Hathaway typically trades at a 5% to 10% discount, while Prosus maintains a 40% to 50% gap. SoftBank’s current 17% sits between the two, reflecting high-quality AI assets offset by concentration risk and ¥16 trillion in interest-bearing debt at the parent level.
Concentration Risk Remains
The optimism has a structural vulnerability: Arm and OpenAI together represent nearly 70% of SoftBank’s total asset value, per Morningstar estimates cited by TradingKey. A $40 billion unsecured bridge loan matures in March 2027, and Wall Street is divided on Arm’s standalone valuation. Goldman Sachs maintains a “Sell” rating on Arm with a $125 price target, while Bernstein targets $300. The average across 40 analysts sits at $228.81, implying 25% downside from current levels.
AI IPO Fever as Market Signal
SoftBank’s rally is not happening in isolation. OpenAI filed its S-1 on May 22. Anthropic is reportedly closing a $30 billion round at a $900 billion valuation. Nasdaq has implemented fast-entry index inclusion rules that would allow these companies to join the Nasdaq 100 within 15 days of listing, as CNBC TV18 reported. The institutional appetite for AI exposure through public markets is reshaping how investors price holding companies with AI portfolios.
Whether SoftBank’s discount compresses further or snaps back depends on three variables: OpenAI’s actual IPO valuation and trading liquidity, SoftBank’s debt refinancing terms, and whether Arm can sustain its current price without new CPU design wins beyond Nvidia. The next data point arrives with Arm’s quarterly earnings.