SoftBank reaches a new high as Tokyo anticipates the upcoming OpenAI IPO.

      On Monday, the Nikkei surpassed 65,000 for the first time, largely driven by SoftBank, which serves as a public proxy for both OpenAI and Arm. SoftBank Group shares reached a record high in Tokyo, helping elevate the Nikkei 225 above 65,000 for the first time and concluding a two-week period during which the Japanese investment giant added over $60 billion to its market capitalization.

      This increase is primarily attributed to the heightened belief that OpenAI is imminent in filing for an initial public offering, marking the largest individual bet ever placed by Masayoshi Son. According to The Japan Times, the Nikkei closed the morning session at 65,254, reflecting a 3.02% gain for the day, buoyed by easing tensions between the United States and Iran, along with the potential resumption of shipping through the Strait of Hormuz.

      However, the rally specific to SoftBank has been ongoing since Thursday, when initial reports surfaced that OpenAI was preparing to confidentially file for an IPO as early as last week, aiming for an autumn launch with a valuation potentially exceeding $1 trillion.

      SoftBank effectively operates as the sole publicly traded proxy for two significant private investments in the AI sector: OpenAI, in which it owns around 13%, and Arm, the British chipmaker where it holds a controlling interest. Both entities experienced sharp movements over the previous week.

      Arm's stock increased more than 16% on Thursday, following a 15% rise the previous day, thanks to Nvidia's stronger-than-expected earnings and indications that hyperscaler spending on AI infrastructure is not slowing. Consequently, SoftBank’s shares surged nearly 20% on Thursday and an additional 12% on Friday, marking one of the largest two-day movements by any major global firm in recent memory.

      The metrics surrounding OpenAI's investment have become substantial enough to render simple comparisons ineffective. SoftBank's CFO, Yoshimitsu Goto, disclosed during the company's earnings call this month that it invested $32.4 billion in OpenAI during the fiscal year that ended in March. Furthermore, a $30 billion follow-on investment has been pledged, with $10 billion already funded in April. By October, the total investment will reach $64.6 billion, supported by a $40 billion bridge loan secured from an expanding syndicate of eight banks.

      For fiscal 2025, SoftBank realized approximately $45.7 billion in cumulative investment gains, enabling it to report a net income of $31.4 billion, which Goto claimed is the highest profit ever recorded by a Japanese company. Most of this value exists in asset markings rather than liquid assets; the anticipated IPO, if it materializes as expected, would convert this marking into a more tangible valuation.

      However, there are valid reasons for caution, which the market is generally aware of. Holding companies usually trade at a discount relative to the actual worth of their assets, and SoftBank has historically been one of the companies with a wider discount. The company’s net asset value, which was around $300 billion in mid-May, fluctuates significantly based on the movements of Arm and OpenAI during any given week.

      OpenAI's latest private funding round of $852 billion is currently under scrutiny from some of the company's investors, who have pointed out discrepancies between its revenue and valuation. Although concerns about OpenAI's failure to meet its internal revenue and user-growth projections have not hindered the stock's upward momentum, they remain present.

      Out of the 12 analysts following the stock, eight have designated it as a strong buy, three as a hold, and one as a strong sell, with the average price target slightly below the current trading price. The unevenness over the next six months revolves around procedural elements: the timing of the IPO filing, its price range, and the eventual debut valuation.

      Son has spent a considerable part of the last year asserting, in his distinctive manner, that OpenAI represents the most significant technological shift of the century. The figures from Monday indicate that the public market has now concurred with him on this scale for the first time.