SoftBank shares swept up in AI chip frenzy ahead of Arm IPO

By Sam Nussey

TOKYO (Reuters) - SoftBank Group Corp shares jumped 5% in early Friday trade as the technology investor - which is preparing an initial public offering of chip designer Arm - was caught up in a frenzy for semiconductor and artificial intelligence-related stocks.

The Japanese conglomerate, which has been hit by the slumping value of its tech portfolio, has seen its shares gain 17% since last week's close.

Still, they are up only 6.4% year-to-date, compared with 172% for U.S. chipmaker Nvidia Corp - an expected beneficiary of investment in AI - and 39% in the Philadelphia SE Semiconductor Index.

On Friday, SoftBank passed the psychological level of 6,000 yen for the first time since February.

"We expressed a view that SBG stock will rally ahead of the ARM IPO later in the year... But given (the) market's fascination for semi-stocks, we think it makes sense to move early," Jefferies analyst Atul Goyal wrote in a client note, upgrading his recommendation on the stock to "buy".

Other beneficiaries of enthusiasm for chip-related stocks included equipment makers Advantest Corp and Tokyo Electron Ltd, which have climbed 109% and 50% respectively year-to-date.

SoftBank CEO Masayoshi Son, who has argued that the rise of artificial intelligence drives his investments, has also been caught up in recent enthusiasm for generative AI, which proponents compare to the arrival of the internet.

"He feels that 'finally my time has come'," SoftBank Chief Financial Officer Yoshimitsu Goto told reporters at an earnings briefing last month.

(Reporting by Sam Nussey; Editing by Jacqueline Wong and Christopher Cushing)