Shares of Softbank Group Corporation, a Japanese multinational telecommunications and internet conglomerate, rose 1.5% to hit an all-time high on July 2. However, a few years ago, the company saw its shares plummet amid the closure of many major tech startups, including WeWork, and the Chinese government’s ongoing crackdown on the tech sector.
Analysts largely attribute the Japanese company’s recent growth to its shift into AI and the stellar performance of its computing subsidiary Arm Holdings.
Enthusiasm for artificial intelligence
The company’s founder and chairman, Masayoshi Son, recently announced that Softbank will pursue a deeper involvement in the field of artificial intelligence (AI) technology.
Son said the company will focus on AI because that is what Softbank is all about and that his mission is to create “artificial super intelligence.”
The company’s shares fell 3% following the comments, but quickly recovered and hit a record high.
Another bubble?
Analysts fear that the generative AI market* may be another bubble about to burst. It’s fair to say that products like OpenAI’s ChatGPT and Microsoft’s Co-Pilot have failed to find a feature that consumers really need and want to use widely.
Yet, as Nvidia stock hit an ATH and showed explosive growth along the way—becoming the fastest company to grow from $2 trillion to $3 trillion in market cap, and only the third to do so—many speculated that the market would remain flat or down.
While nothing in tech or finance is certain, like weather forecasting, it’s worth noting when circumstances come together to create a negative pressure system. In Softbank’s case, the sudden interest from investors and shareholders in the company’s holistic approach to joining the wave of companies focusing their efforts on generative AI has bring record breaking dividend
But about 24 years ago, Softbank invested heavily in dotcom startups, pushing the company’s stock price to a record high and eventually losing 99% of its total value when the bubble burst in March 2000.
Softbank was not the only company to suffer losses from the dotcom bubble burst, and unlike many of its contemporaries, it has survived to reach new heights today. But it is worth noting that it took Softbank Group decades to recover.
*Generative AI is a type of artificial intelligence that focuses on generating new content/data based on existing data.
Itadori
According to Cointelegraph
