SoftBank Group (TSE:9984) is back in focus after Anthropic, one of its key AI investments, filed for a US IPO, lifting sentiment around AI exposed Japanese stocks in recent trading.
Recent trading reflects that shift in mood. SoftBank Group’s 7 day share price return of 10.69% has arrived after a 30 day share price decline of 21.04% and a 90 day share price fall of 9.41%. The 1 year total shareholder return is down 27.36%, compared with a very large 3 year and 5 year total shareholder return gain of more than 2x. This points to long term momentum that has recently cooled before this latest Anthropic driven bounce.
Scan other AI-exposed opportunities moving on similar catalysts with our hand picked list of 12 AI small caps alongside SoftBank Group.
The Anthropic bounce has reset the mood around SoftBank Group in a hurry. After such a sharp swing, an important question is whether the current price still offers an appealing balance between risk and potential reward as the valuation picture comes into focus next.
Most Popular Narrative: 39% Undervalued
SoftBank Group closed at ¥4,765, while the most followed narrative points to a fair value of about ¥7,782, which implies a sizable valuation gap that investors now have to weigh against funding, earnings and AI exposure risks.
SB Energy’s planned Nasdaq listing, backed by roughly 8.8 GW of contracted AI data center capacity and an estimated US$430b lease revenue backlog that is still to be realized, offers a path for SoftBank Group to crystallize part of this embedded value and potentially improve reported NAV and investment gains.
The planned multi gigawatt AI data center build out in France, including an initial €45b investment to deliver 3.1 GW of capacity by 2031, is expected to add a long duration stream of infrastructure related revenue that can influence SoftBank Group’s consolidated cash flow and long term earnings profile.
See why 23 investors see SoftBank Group as 39% undervalued.
Result: Fair Value of ¥7,782 (UNDERVALUED)
Still, that upbeat SoftBank Group story can unravel quickly if refinancing US$65b of AI related commitments drives funding costs higher, or if key IPO timelines slip further.
Find out about the key risks to this SoftBank Group narrative.
Another View: SWS DCF Signals Caution On SoftBank Group
Analysts see upside based on a fair value of ¥7,782, yet the SWS DCF model paints a different picture. On that cash flow view, SoftBank Group at ¥4,765 trades above an estimated value of ¥2,224, which points to less upside and more downside risk. Which lens do you trust more when the story leans so heavily on future AI cash flows?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out SoftBank Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 15 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Sentiment around SoftBank Group is split, and that is exactly when doing your own homework matters most. Move quickly and weigh the 1 or more risks against the 1 or more rewards that our work has surfaced by starting with 4 key rewards and 4 important warning signs.
Looking For More Ideas Beyond SoftBank Group?
If the SoftBank Group story has you thinking harder about where to put fresh capital next, cast a wider net with a few focused stock shortlists.
- Target steadier compounders by scanning our 26 resilient stocks with low risk scores that aim to keep volatility and business risk in check while still leaving room for upside.
- Hunt for overlooked potential by checking the 71 high quality undiscovered gems that pair cleaner balance sheets with financial traits many investors have not fully priced in yet.
- Aim for quality first by working through the list of solid balance sheet and fundamentals (23 results) so cash flows and debt profiles do more of the heavy lifting for your returns.
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