SoftBank Remains Committed to AI Despite Market Downturn
Despite a challenging global market and a significant drop in its stock price, Japanese investment giant SoftBank Group (SFTBY) remains steadfast in its commitment to artificial intelligence (AI).
SoftBank's Belief in AI's Transformative Potential
On Wednesday, SoftBank CFO Yoshimitsu Goto reaffirmed the company's belief in the transformative potential of AI. "We believe in AI, and believe it can change people's lives," Goto stated during a briefing following the announcement of SoftBank's earnings for the April-June quarter.
Financial Stability and Investment Strategy
Despite the market's volatility, Goto assured investors that SoftBank's financial status remains "robust and stable." He added, "There will be no change to our financial strategy for fiscal 2024."
First-Quarter Losses and Future Investments
SoftBank's first-quarter losses were lower than the same period last year, thanks to a weak yen and increased earnings from chip designer ARM Holdings (ARM), a company in which SoftBank holds a significant stake.
Regarding future investments, Goto acknowledged the need for caution due to market volatility. However, he also noted that the current lower stock prices present a good investment opportunity.
Share Buyback Program
SoftBank also announced a share buyback program of 500 billion yen ($3.4 billion) over the next year, motivated in part by the company's record-low share price on Monday.
Market Context
Goto's optimistic remarks follow SoftBank Group's largest single-day stock price drop since its 1998 listing. This occurred on Monday as Japan's benchmark Nikkei Stock Average experienced its worst daily sell-off in history.
U.S. stocks also took a downturn on Wednesday, with an initial rally fizzling out. The S&P 500 fell by 0.8%, the Dow Jones Industrial Average dropped 0.6%, and the Nasdaq composite decreased by 1%.
The market's decline was influenced by Nvidia Corporation (NVDA), a major player on Wall Street, which shifted from a 4.4% morning gain to a 5.1% loss, heavily weighing down the S&P 500.