Stock market today: S&P 500 cuts some losses, but Nvidia slip keeps gains in check
Investing.com - Shares of Nvidia dipped in premarket U.S. trading after Japanese tech investment giant SoftBank announced that it had sold its entire stake in the artificial intelligence-darling for $5.83 billion.
In an earnings statement, SoftBank said it had offloaded 32.1 million shares in Nvidia last month, as well as a portion of its stake in telecoms group T-Mobile.
SoftBank CFO Yoshimitsu Goto told investors that the sales were part of a push to ensure "asset monetization," according to translated comments cited by CNBC.
The announcement of the stake sale comes as SoftBank has looked to bolster its position in OpenAI, the maker of the ChatGPT chatbot which has become a figurehead of a wider surge in enthusiasm around the capabilities of AI.
Earlier this year, SoftBank agreed to lead a funding round worth up to $40 billion in OpenAI at a valuation of $300 billion. Last month, the conglomerate formed a part of a group of investors acquiring $6.6 billion worth of OpenAI shares from the AI startup’s employees at an increased valuation of $500 billion.
Yet some doubts have begun to swirl around the AI boom, especially the massive sums of money several technology firms -- including OpenAI -- plan to spend on building out the nascent technology. Investors have started to flag worries over when the capital expenditures will eventually reap rewards.
According to Reuters, Goto said that while "[t]here are various opinions [...] SoftBank’s position is that the risk of not investing is far greater than the risk of investing."
SoftBank’s stake sales, as well as strong gains on investments at the company’s flagship Vision Fund, powered a doubling in fiscal second-quarter net profit compared to a year ago. Net profit attributable to shareholders came in at 2.502 trillion yen ($16.3 billion) for the July-September quarter, much higher than Bloomberg estimates of 418.23 billion yen.
Despite exiting its position in Nvidia, SoftBank remains exposed to the AI semiconductor giant through other ventures, such as the $500 billion Stargate project to build out data centers in the United States, CNBC noted.
(Reuters contributed reporting.)