SoftBank Group's share price has advanced significantly over the past year, driven by investor optimism surrounding its exposure to artificial intelligence and semiconductor trends. This enthusiasm is further fueled by OpenAI's projected spending increases and SoftBank's strategic acquisitions in the chipmaking sector. However, a range of valuation analyses presents a mixed picture, suggesting potential overvaluation alongside indications of a fair market price.

SoftBank Shares Experience Substantial Gains

SoftBank Group (9984.T) has seen its share price advance considerably over the past year, with a 94.8% increase over the last 12 months and a 64.6% gain year-to-date. This performance reflects robust investor interest in the Japanese conglomerate's strategic focus on the Artificial Intelligence (AI) Sector and Semiconductor Sector. The company's market capitalization has soared, adding over $65 billion since early 2025, positioning SoftBank as a top performer on Tokyo's Prime market.

Driving Forces: OpenAI Projections and Semiconductor Strategy

The strong market performance of SoftBank Group is largely attributed to its deep involvement in AI and its aggressive semiconductor strategy. A key driver of this sentiment is the updated projections for OpenAI's spending. The creator of the popular ChatGPT chatbot is now expected to burn approximately $115 billion through 2029, a significant increase of $80 billion from previous estimates. This substantial capital outlay is intended to power its AI infrastructure, with projections indicating a cash burn of over $8 billion this year, escalating to $17 billion next year, $35 billion in 2027, and $45 billion in 2028.

OpenAI's plans extend to developing its own data center server chips and facilities, aiming to control soaring costs. The company is set to produce its first AI chip next year in partnership with a U.S. semiconductor giant and has deepened its tie-up with Oracle for 4.5-gigawatts of data center capacity, alongside integrating Google Cloud as a computing supplier. SoftBank's reported $40 billion follow-on investment in OpenAI further underscores its commitment to the AI ecosystem.

In parallel, SoftBank is actively pursuing a bold semiconductor strategy. The company is reportedly in discussions to acquire major chipmaking assets and has already acquired the chip designer Ampere for $6.5 billion. Additionally, SoftBank holds a $3 billion stake in NVIDIA Corp. and made a recent $2 billion investment in Intel in mid-August 2025. These moves highlight SoftBank's comprehensive approach to controlling the AI value chain, with investments spanning TSMC, Oracle, and emerging AI firms like Graphcore.

Market Reaction and Valuation Discrepancies

Investor optimism has propelled SoftBank's stock, with market participants betting on the long-term potential of its AI and semiconductor ventures. This is evidenced by the company's current Price-to-Earnings (PE) ratio of 21.8x, which is notably higher than the industry average of 18.5x and its peer average of 15.5x, suggesting a premium attributed to its strategic focus on these high-growth sectors.

However, various valuation models present differing perspectives on SoftBank's current share price. A Discounted Cash Flow (DCF) analysis, for instance, suggests that SoftBank is 128.1% overvalued at ¥6,660 per share compared to its current market price. Another DCF model calculates the stock's intrinsic value at 11,187.06 JPY, indicating it is overvalued by 38% compared to a market price of 18,190 JPY (as of September 15, 2025). In contrast, a separate DCF analysis, based on a 2 Stage Free Cash Flow to Equity model, estimates an intrinsic value of ¥245.66 per share, implying a 6.6% discount and suggesting the stock is valued close to its fair worth (as of September 14, 2025). Similarly, a PE ratio analysis indicates SoftBank is currently "about right" relative to its fair ratio of 21.4x, with its current PE at 21.8x.

These conflicting analyses underscore the uncertainty surrounding the long-term sustainability of SoftBank's current valuation, reflecting the speculative nature of investments in rapidly evolving technological fields.

Broader Context and Implications

SoftBank's ambitious strategy, led by Masayoshi Son, involves substantial capital allocation, including securing billions in loans for AI investments. This high-stakes approach is drawing comparisons to historical industrial bets and aims to capitalize on what many see as a paradigm shift driven by AI advancements. While SoftBank's Vision Fund 2 has faced challenges, incurring a $22 billion loss across 280 investments, its strategic investment in OpenAI has been a significant turning point, nearly doubling the worth of SoftBank's initial $9.7 billion stake due to OpenAI's escalating valuation, now reportedly reaching $500 billion.

Despite the significant gains and strategic positioning, the immense capital required to fuel these ambitions, such as OpenAI's projected $320 billion in compute spend from 2025 to 2030, raises questions about potential financial strain. SoftBank's diversified portfolio across various AI and semiconductor players is viewed by some as a hedge against risks, demonstrating a comprehensive effort to control the AI value chain.

Expert Commentary

Industry analysts and strategists are closely monitoring SoftBank's trajectory. The divergent valuation analyses reflect a broader debate on whether the current enthusiasm for tech, particularly AI, represents a fundamental shift in market dynamics or an overinflated bubble driven by speculative hype. Some analysts suggest that the premium placed on SoftBank's stock indicates strong investor optimism regarding its long-term bets in AI infrastructure, while others caution about the risks associated with immense capital outlays and the potential for market corrections if growth expectations are not met.

Looking Ahead

In the coming weeks and months, investors will be keenly watching several key factors. The actualization of OpenAI's spending projections and its impact on the broader AI landscape will be critical. The successful integration and profitability of SoftBank's chipmaking acquisitions, along with its ongoing investment strategy in semiconductor companies, will also influence future performance. The sustainability of SoftBank's high-stakes investment model, particularly in managing its debt levels in the face of massive capital requirements, remains a central theme. While successful execution of its AI and chip strategies could solidify SoftBank's position as a major player in these strategic fields, any shortfall in expected growth or profitability could lead to increased volatility and potential price corrections.