One Bet Is All It Takes for Some SoftBank Love

(Bloomberg) -- One bet is all it took.

SoftBank Group Corp.’s 27 percent increase in operating income last year wasn’t because of fantastic performances across founder Masayoshi Son’s entire ensemble.

Its domestic telco, its distribution businesses and Yahoo Japan Corp. all bombed in the fiscal year ended March 31. Yet the SoftBank Vision Fund and Delta Fund delivered the one hit needed. The funds posted 302.9 billion yen ($2.8 billion) in operating profit, equal to 23 percent of the corporate total, without which operating income would have fallen 2.5 percent.

Combined, the Vision Fund and Delta Fund delivered 346 billion yen in unrealized gains on the valuation of investments. And it was a bet on one chipmaker that delivered most of it.

Nvidia Corp., the Santa Clara, California-based designer of graphics chips used in computers, games consoles and cryptocurrency mine, climbed 122 percent during SoftBank’s fiscal year. In the March quarter alone its stock rose 20 percent.

Nvidia’s own net income jumped 83 percent to $3.05 billion for its fiscal year, but it’s the hope and hype over the firm’s prospects in crypto mining and machine learning that’s driven the stock to new heights.

As much I’ve poked fun at Son’s penchant for one-hit wonders, it is worth saying that he picked this chart-topper correctly.

To contact the author of this story: Tim Culpan at tculpan1@bloomberg.net.

1. The net gain accounts for the addition of some dividend and interest income, while taking out the funds' operating costs.

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