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SoftBank Stock Surges on Upgraded Outlook

Shares of SoftBank Group climbed more than 10% after its telecom subsidiary delivered a stronger-than-expected earnings outlook, reinforcing investor confidence in the group’s operating momentum and long-term artificial intelligence strategy.

The rally followed SoftBank Corp’s decision to raise its full-year profit and revenue forecasts, signaling stable execution despite a challenging consumer telecom environment. The upbeat guidance, combined with renewed enthusiasm around chip designer Arm Holdings, helped reposition SoftBank as a major beneficiary of the global AI investment cycle.

Telecom Arm Delivers Record Revenue

For the first nine months of fiscal 2025, SoftBank Corp reported revenue of 5.2 trillion yen, an 8% increase from the same period a year earlier and the highest level ever recorded for that timeframe. Operating income also rose 8% year-on-year to 884 billion yen, reflecting disciplined cost management and steady enterprise demand.

On the back of this performance, the company raised its full-year revenue forecast to 6.95 trillion yen, up from its previous estimate of 6.7 trillion yen. Its operating income target was also increased to 1.02 trillion yen, marking a key milestone as the company pushes toward sustainable profit growth.

Management said the results highlight progress toward its fiscal 2025 objectives, even as the company recalibrates parts of its consumer strategy to prioritize profitability rather than aggressive subscriber expansion.

Consumer Business Trades Growth for Stability

Within the consumer segment, revenue edged up 3%, while segment income climbed 6%, indicating improved margins. However, the number of smartphone subscribers declined by roughly 100,000 in the third quarter after SoftBank tightened customer acquisition policies and reduced promotional spending.

Executives described the move as a deliberate shift toward higher-quality customers and longer-term earnings resilience, a strategy that appears to be resonating with investors amid intensifying competition in Japan’s telecom market.

Arm Holdings Strengthens the AI Narrative

Beyond telecom earnings, SoftBank Group benefited from a sharp rally in Arm Holdings, the British chip designer in which SoftBank retains a significant stake. Market participants see Arm as a critical pillar of SoftBank’s exposure to artificial intelligence, cloud computing, and next-generation data centers.

According to market strategists, optimism around Arm’s AI-driven growth has increasingly outweighed concerns about short-term fluctuations in licensing revenue.

Arm CEO Rene Haas said the company’s data center royalty revenue has grown more than 100% year-on-year, driven by demand for AI workloads and custom silicon. He added that Arm expects its data center business to surpass its mobile segment in the coming years, marking a structural shift in the company’s revenue base.

Expanding Role in Global Cloud Infrastructure

Arm is also targeting a major expansion within hyperscale cloud providers. The company aims to power roughly 50% of the central processing units used by the world’s largest cloud computing firms by the end of the year, up significantly from current levels.

This ambition aligns with the broader industry trend toward energy-efficient processors optimized for AI training and inference, an area where Arm’s architecture has gained traction against traditional x86-based designs.

Record Quarterly Revenue Despite Licensing Miss

Although Arm fell short of some Wall Street expectations on licensing revenue, it still posted record quarterly revenue of $1.242 billion for the final three months of 2025. The figure was driven primarily by AI-related demand and exceeded analyst consensus measures that place greater weight on historically accurate forecasts.

The strong performance reinforced the view that Arm’s long-term growth story remains intact, particularly as AI spending accelerates across data centers, edge computing, and enterprise applications.

Investor Sentiment Turns More Constructive

Taken together, the raised outlook at SoftBank’s telecom unit and Arm’s accelerating AI exposure have helped shift investor sentiment toward the broader SoftBank Group. After a period marked by volatility and concerns over portfolio valuations, markets are once again focusing on the group’s ability to capitalize on structural technology trends.

For investors, the latest results suggest that SoftBank’s strategy of combining stable cash-generating assets with high-growth AI platforms may be regaining credibility, especially as earnings visibility improves across its core businesses.