SoftBank Shares Under Pressure Amid Concerns Over Arm Holdings

SoftBank JP3436100006

While technology stocks across Asia continue to reach new peaks, SoftBank Group is struggling to keep pace. Investor sentiment is being weighed down by a recent downgrade of its most significant holding, overshadowing positive developments within its Vision Fund investment portfolio. The market is currently assigning greater weight to the risks surrounding chip designer Arm than to the opportunities in SoftBank's broader tech bets.

Shares of the Japanese conglomerate fell 1.01 percent in Tokyo trading on Friday, closing at 4,010 yen. This performance distinctly decouples SoftBank from the broader regional rally, with indices like Taiwan's Weighted Index and South Korea's Kospi both hitting fresh record highs. The downward pressure was already evident on Thursday, when its U.S.-traded ADRs declined by more than four percent. From a technical analysis perspective, the psychologically significant support level of 4,000 yen is now in focus.

The primary source of investor caution is SoftBank's substantial exposure to Arm Holdings. On January 13, Bank of America revised its rating on the chip architecture firm, which SoftBank still majority-owns, from "Buy" to "Neutral." Concurrently, the bank's price target for Arm was reduced from $145 to $120.

Market experts cited potential softness in smartphone demand as the rationale for the adjustment. Given that Arm constitutes a major component of SoftBank's net asset value (NAV), any valuation shifts for the chip designer have a direct and pronounced impact on the holding company's share price.

Vision Fund Activity Provides a Counterpoint

Despite the headwinds from Arm, there are constructive moves within SoftBank's investment portfolio. Reports indicate that Keenon Robotics, a manufacturer of service robots, is considering an initial public offering in Hong Kong. A successful listing in the current environment would inject fresh liquidity into the group.

In a separate development, SoftBank recently led a $1.4 billion funding round for robotics startup Skild AI. This investment reportedly values the company at $14 billion. The move highlights CEO Masayoshi Son's intensified strategy of channeling capital into artificial intelligence and robotics. This focus was further demonstrated by the group's recent increase of its stake in OpenAI to 11 percent.

Market Awaits Clarity

The current investment climate appears to favor direct exposure to hardware companies over the complex, multi-layered structure of a holding firm like SoftBank. Investors seeking a clearer picture of the conglomerate's financial health will likely find it in the upcoming quarterly earnings report, scheduled for February 12, 2026. Key points of interest will include updated valuations for its private asset holdings and an assessment of the Vision Fund's profitability following recent volatility in the technology sector.