MW U.S. investors liked the Stargate AI news. Asian investors loved it.

By Steve Goldstein

SoftBank shares surged on five times the previous day's volume

SoftBank shares surged - on five times the previous day's volume - on Wednesday after the Japanese investment group landed a starring role in an U.S. artificial intelligence infrastructure buildout package backed by President Donald Trump.

Softbank will have "financial responsibility" for the project with Masayoshi Son serving as the chairman of the venture, news that drove the stock (JP:9984) 11% higher in Tokyo. SoftBank's top holding, ARM $(ARM)$, will be one of the technology partners, alongside companies including Oracle $(ORCL)$ and Nvidia $(NVDA)$.

The Stargate venture will invest an initial $100 billion that could reach $500 billion over four years.

A Citigroup analyst, Mitsunobo Trsuruo, said SoftBank's investor relations didn't comment beyond what's contained in the press release, but indicated it may discuss the project at the third-quarter results briefing due Feb. 12. The analyst estimated the firm could borrow an addition 5 trillion yen ($32 billion) while maintaining its preferred financial discipline.

SoftBank ended the previous quarter with a loan-to-value ratio of 12.5%, as its presentation identified 25% as a key level not to exceed.

SoftBank wasn't the only Asian company moving on the news. Foxconn Industrial Internet (CN:601138), a maker of cloud computing equipment - including for Oracle - reached the limit up in the morning session in Shanghai.

Hochtief (XE:HOT), whose Turner subsidiary is one of the largest data-center contractors, edged up 1% in Frankfurt trade.

-Steve Goldstein

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January 22, 2025 03:34 ET (08:34 GMT)

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