SoftBank stock price tanks 10% after selling Nvidia stake worth $5.8 billion

SoftBank stock price crashed 10% on Wednesday after the Japanese tech investor said it had sold its entire stake in US chip giant Nvidia for $5.83 billion.

Shares of the Japanese firm fell to a one-month low during early trading in Tokyo, despite the company reporting stronger-than-expected quarterly results and announcing a 4:1 stock split.

Meanwhile, Nvidia stock price settled nearly 3% to $193.16 on NASDAQ.

SoftBank's stake in Nvidia

SoftBank previously exited its Nvidia holdings in 2019 but began rebuilding small positions in 2020—two years before ChatGPT’s debut sparked a massive rally. By the end of March, it had raised its stake in the US chipmaker to about $3 billion. That move has paid off handsomely, with Nvidia’s market value soaring by over $2 trillion since then.

The surge, coupled with SoftBank’s investment in OpenAI, has significantly boosted its earnings. The Japanese conglomerate posted a surprise net profit of ¥2.5 trillion ($16.2 billion) in the fiscal second quarter, far exceeding analysts’ average estimate of ¥418.2 billion. OpenAI’s valuation has climbed by $14.6 billion since SoftBank’s investment.

“We want to provide a lot of investment opportunities for investors, while we can still maintain financial strength,” SoftBank’s chief financial officer, Yoshimitsu Goto, was quoted as saying by CNBC during an investor presentation.

Nonetheless, despite the recent divestment, SoftBank continues to maintain close business ties with Nvidia through its wider portfolio and partnerships.

Several other technology stocks in the region also registered losses. Semiconductor testing firm Advantest and chip equipment manufacturer Tokyo Electron dropped by more than 2% each. Taiwan’s TSMC, the world’s leading contract chipmaker, slipped 0.34%, while South Korea’s memory chip major SK Hynix declined 1.62%.

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