SoftBank's Vision Fund sees first annual gain since 2021

SoftBank (SFTBY) posted a full-year profit in its Vision Fund for the first time since 2021, boosted by its investment in chip designer Arm Holdings (ARM). SoftBank has a 90% stake in Arm, accounting for almost half of its entire portfolio.

The company's investment chases the momentum of a heated artificial intelligence race.

Yahoo Finance's Seana Smith and Myles Udland break down the history of SoftBank's Vision Fund and what its investment in Arm could signal for its future.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video transcript

Soft Bank posting a full year profit in its vision fund for the first time since 2021.

Boosted by its investment in arm.

Now, the company's 90% stake in Arm now accounts for almost half of its entire portfolio.

So a lot of this and the resurgence that we've seen around Softbank here, at least in the last quarter has been surrounding arm holdings and the lift that that has been uh provided here for earnings and they're looking here to leverage arm technology going and the investment there, some of the funding that they see from there just in terms of what they plan to prioritize for future investments.

And it looks like at least for now from this, they're looking to use some of that funding to go after new investments.

And you have to think that a lot of that now is gonna be surrounding A I and exactly how that could transform a number of industries.

Yeah.

And I think um you kind of have two parts to this where on the one hand, the track record of, you know what Massa so has done at off bank over the last several decades um obviously says great, you know, let let's see what happens.

There's been some massive massive winners in that portfolio over time.

On the other hand, you look at the way that, you know, the vision fund, the reputation that the vision fund got, um you know, over like it's called the mid 20 tens of kind of moment.

I mean, we work as the canonical example, right?

But uh momentum chasing, let's say the VC I mean, this is the, the the thing, you know, V CS are momentum chasers, they all kind of go into the same thing.

Everyone's going into A I now and I, I sort of wonder, did you have the hit?

Like arm has been a huge winner is probably going to continue to power the gains in that portfolio.

Sure, you take those winnings, you reinvest them into other A I plays, et cetera, et cetera.

Um But you, you look at the success of that where, you know, arms on a new company, this is a company that has been in the foundry business for a long time and there was a bull case around it uh on the cloud 10 years ago and you know, that went fine.

Now you've got the bull case on A I and how much more, you know, how many more bets are there to make on A I?

And I know like I'm, I'm sitting here a year into the A I thing saying maybe it's over.

But um you just sort of the, the more companies that come out and we've got events this week, events next week, you get the apple, all this kind of stuff.

Um ok, so, so thanks for the latest to come in and say we're gonna invest in A I great.