SoftBank Group is expected to report another strong quarterly profit on Wednesday, driven by its lucrative bet on OpenAI. However, analysts are increasingly concerned about the debt the Japanese tech giant is taking on to fund this investment.
Since OpenAI’s valuation surged to $840 billion in February, SoftBank’s 11 percent stake is now worth an estimated $80 billion, up from $54.4 billion in December. TD Cowen analyst Krish Sankar estimates SoftBank will invest an additional $30 billion in OpenAI through 2026, ahead of a potential public listing late next year or early 2027.
But the concentration of risk in a single private company has sparked worries, drawing comparisons to the failed WeWork saga. Jefferies analyst Atul Goyal notes SoftBank has provided most of the capital in recent OpenAI funding rounds, forcing it to borrow more.
S&P Global Ratings recently revised SoftBank’s credit outlook to negative, citing deteriorating asset liquidity and financial capacity due to these investments. While SoftBank secured a $40 billion bridge loan in March, reports suggest it had to downsize a proposed margin loan after creditor hesitation.
Investors are now seeking clarity on funding sources. TD Cowen estimates SoftBank still needs $25 billion for other commitments in 2026, including $16 billion for Stargate data centers and $9 billion for acquisitions of ABB Robotics and DigitalBridge.
Despite these concerns, SoftBank’s shares have nearly doubled since early April, approaching last October’s record high of 6,923 yen. Nomura recently raised its price target to 7,500 yen, citing progress in SoftBank’s proprietary AI and robotics initiatives.