SoftBank Group Corp shares surged over 10 percent as its telecom unit, SoftBank Corp, increased its annual profit expectations, and renewed enthusiasm about Arm Holdings contributed to positive investor momentum on the artificial intelligence portfolio of the group.
The first three quarters of fiscal 2025 revenues at SoftBank Corp increased 8 percent over the previous year, to 5.2 trillion yen, a record over the period, and operating income also increased 8 percent to 884 billion yen.
In keeping with the trend, the telecom subsidiary raised its annual revenue outlook to 6.95 trillion yen, compared to the 6.7 trillion forecasts, and the target of its operating income to 1.02 trillion yen.
SoftBank Corp reported that the outcomes highlight a consistent implementation of its objectives in the fiscal year 2025, although it is streamlining certain components of its consumer business to achieve long-term profitability instead of subscriber growth.
The consumer business sales recorded a small growth of 3 percent, and segment income improved by 6 percent, as the number of smartphone subscribers declined by 100,000 in the third quarter amid the company tightening its customer-acquisition policy.
Andrew Jackson, Head of Japan equity strategy at Ortus Advisors, stated that a sudden surge in Arm Holdings was also an added impetus to SoftBank Group, as it owns significant shares in the British chip-designer. The strength of AI-related growth is rising beyond smartphones to form the upside in Arm.
Rene Haas, CEO of ARM, said in an earnings call on Wednesday, “Our data center royalty revenue has grown more than 100% year-on-year, and we expect in a few years our data center business to be our largest business, larger than mobile.”
The company is also looking forward to providing half of the central processing units of the largest cloud computing firms in the world, also referred to as hyperscalers, by the end of the year.
Although Wall Street estimates showed a 5 percent decrease in licensing revenue, Arm reported record quarterly revenue of 1.242 billion in the final three months of 2025, propelled by artificial intelligence demand.
That figure surpassed LSEG SmartEstimates, which is skewed more towards analyst forecasts that are more precisely accurate.
