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Investing.com -- Morgan Stanley lifted its price target on SoftBank Group Corp. (TYO:9984) to 15,000 Japanese yen from 8,000 yen, a move driven by a significant increase in AI-related assets and stronger market recognition of the company’s exposure to the theme.
The Wall Street giant said the adjustment reflects a cut in its net asset value (NAV) discount from 50% to 30%, driven largely by the group’s expanded investment in OpenAI.
The bank noted that SoftBank’s NAV discount, which ranged between 55–60% in early 2025, has recently narrowed to around 35%, a shift it links to the AI theme and expectations for an OpenAI IPO.
“Due to the execution plan for investment in OpenAI, the proportion of AI-related assets is expected to rise significantly. OpenAI alone may exceed 20% in asset allocation,” analyst Tetsuro Tsusaka said in a note.
This discount drop is prompting a reassessment of SoftBank’s valuation as the market continues to pursue AI opportunities. Historical patterns show the discount narrowing into the low 30% range during catalyst events, such as the lead-up to ARM’s IPO in 2023.
Morgan Stanley also outlined a change in SoftBank’s portfolio composition, with the combined value of OpenAI and ARM projected to reach about 60% of total assets by the end of 2025.
This follows a series of large-scale investments in OpenAI this year, including $7.5 billion in the second quarter and a planned $22.5 billion in the fourth quarter.
While maintaining an Equal-weight rating, the bank described “the thematic appeal of AI and the increased asset ratio of high-profile companies like OpenAI and ARM” as “sufficient catalysts” for further narrowing of the NAV discount.
It also pointed out that in past cycles, reduced discounts have coincided with improved market perception of SoftBank’s strategic shifts.