SoftBank profits drop 18%, stock falls 4% in Tokyo

SoftBank Group just posted numbers that look contradictory at first glance, and that's kind of the point with this company. Profit for the April-June quarter came in at 347.3 billion yen, roughly $2.2 billion, down 18% from the 421.8 billion yen it booked a year earlier. Meanwhile revenue climbed almost 11% to 2 trillion yen, about $12.7 billion. Higher costs ate into the gains, and Tokyo investors weren't pleased — the stock closed 4% lower on the news.

This is the rhythm SoftBank has trained the market to expect. Masayoshi Son's company doesn't run like a typical conglomerate; it runs like a giant, leveraged bet through its Vision Fund, and that fund's fortunes swing with whatever's hot or cold in tech that quarter. One period it's flush from a chip rally, the next it's absorbing a writedown somewhere else in the portfolio. CFO Yoshimitsu Goto tried to steer attention toward the bright spots, telling reporters that Arm — the British chip design firm SoftBank controls — is performing well.

The more interesting detail buried in the earnings call is the OpenAI number. SoftBank has poured another $20 billion into the ChatGPT maker, and Goto signaled there's more coming this fiscal year. That's a serious escalation of an already enormous position, and it tells you where Son thinks the next decade of returns will come from. Add in stakes in ByteDance, Intel, TSMC, and Japan's PayPay, and you get a portfolio that reads like a bet on almost every frontier of computing at once.

Son has also been talking up autonomous driving lately, and SoftBank's Vision Fund has been folding ABB's robotics unit — arms, automation, mobility — into its holdings. None of this is new territory for a company that started in 1981 selling software distribution and internet ventures before morphing into arguably the most aggressive tech investor on the planet. SoftBank doesn't issue annual guidance, which is either refreshing honesty about how unpredictable this business is, or a convenient way to avoid ever being pinned down on a number.