SoftBank shares sink after first net loss in nearly two years

What moved the stock

The shares slid to ¥3,465 in Tokyo on Wednesday, extending a slide that has left them down almost 60% from June's record. Over that stretch, the stock has ranked among the weakest names on the Nikkei 225 Stock Average. Trading has also gotten choppier as investors try to weigh both the hazards and the upside of the firm's AI exposure.

Inside the loss

SoftBank swung to its first net loss in nearly two years, driven by a $3.7 billion markdown related to its US data center push and the impact of declining AI valuations. The quarter's ¥1.12 trillion deficit stems in part from writing down nonrefundable prepayments made to lock in power generation equipment for the planned 8 gigawatt project in Ohio and additional US data centers.

While some of the red ink reflects accounting effects, Jefferies analyst Atul Goyal highlighted what he called the bigger problems: "the real issues are a ¥597 billion power-equipment write-off that raised more questions" than what the management could explain, plus financing costs that were 2.6 times higher than a year earlier. "Management is playing defence."

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Why it matters for your portfolio

The combination of a large quarterly loss, heavier interest expense, and questions around US power equipment spending points to a bumpier road for SoftBank's equity story in the near term. Volatility around its AI bets also remains elevated, which can swing sentiment quickly.

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