Shares of SoftBank Group Corp jumped more than 10% after the company delivered a rare combination of near-term earnings visibility and long-term artificial intelligence optimism. The rally was triggered by an upgraded outlook from its listed telecom subsidiary, SoftBank Corp, and reinforced by renewed enthusiasm around chip designer Arm Holdings, a cornerstone of SoftBank’s AI strategy. Together, the developments helped shift investor focus away from SoftBank’s historically volatile investment portfolio toward a more balanced view of cash generation and structural growth.

Telecom Delivers Stability and Upgrades Expectations

SoftBank Corp’s latest results underscored the value of predictable earnings within the broader group. Revenue for the first nine months of fiscal 2025 rose 8% year-on-year to a record ¥5.2 trillion, while operating income also increased 8% to ¥884 billion. On the back of that performance, the company lifted its full-year revenue forecast to ¥6.95 trillion and raised its operating income target to ¥1.02 trillion.

For investors, the significance lies less in headline growth and more in quality. The telecom unit emphasized disciplined execution, prioritizing profitability over aggressive subscriber expansion. While smartphone subscribers fell by 100,000 in the third quarter, consumer segment income still rose 6%, signaling improved pricing, cost control, and customer mix. In a group often associated with bold bets and uneven returns, the telecom arm’s steady contribution is increasingly seen as an anchor.

Arm’s AI Traction Reignites the Growth Narrative

Alongside the telecom upgrade, Arm’s share-price strength provided a powerful tailwind for SoftBank. The British chip designer has become central to SoftBank’s AI exposure, particularly as growth shifts from smartphones toward data centers and cloud infrastructure. Arm’s management highlighted that data center royalty revenue has grown more than 100% year-on-year, with expectations that the segment will eventually surpass mobile as its largest business.

That trajectory resonates with investors at a time when hyperscalers are spending aggressively on AI infrastructure. Arm’s ambition to supply half of the CPUs used by the world’s largest cloud providers by year-end positions it directly within that capital-expenditure cycle. Although licensing revenue missed some traditional estimates, Arm still posted record quarterly revenue of $1.24 billion, reinforcing confidence in its longer-term earnings power.

Investor Psychology Turns More Constructive

SoftBank’s rally reflects a broader shift in how the market is framing the group. Historically, sentiment has swung sharply with the valuation of its technology holdings. This time, however, investors appear to be rewarding a clearer bifurcation: stable, cash-generative telecom operations on one side, and leveraged upside to AI-driven semiconductor growth on the other.

That balance matters. In an environment where AI enthusiasm is increasingly scrutinized for signs of excess, SoftBank’s ability to point to tangible earnings growth in its telecom arm helps mitigate concerns about speculative exposure. It also provides optionality, giving the group financial flexibility as it navigates future AI investments.

Looking ahead, SoftBank’s trajectory will depend on whether Arm can sustain its data center momentum and whether the telecom unit continues to deliver predictable cash flows amid competitive pressures. For now, the market reaction suggests investors are more willing to re-engage with SoftBank’s story, seeing less of a binary bet and more of a diversified platform aligned with the AI cycle.