Thanks for joining me. Shares in one of the world’s biggest technology investors plunged after it revealed it had sold its entire stake in Nvidia for $5.8bn (£4.4bn).
SoftBank sank as much as 10.1pc after it disclosed on Tuesday that it had offloaded its entire shareholding in the $4.7tn (£3.6tn) chip giant in October.
While its profits soared as a result of the sale, as much as 3.2 trillion yen (£15.7bn) was wiped off its market valuation during trading today. Shares eventually closed down 3.5pc, delivering a 1 trillion yen (£5.4bn) blow.
Nvidia shares dropped by 3pc on Wall Street, wiping $188.3bn (£143.3bn) off its total worth.
SoftBank’s shares had surged nearly 150pc this year as it is seen as a bellwether for the boom in demand for AI. However, investors have grown concerned about the sky-high valuations of companies in the sector.
Last month Michael Burry, the so-called Big Short investor who predicted the 2008 financial crisis, unveiled a series of bets against major AI stocks including Nvidia.
Executives at SoftBank on Tuesday played down those concerns and insisted the decision to cash in on its Nvidia shares was down to its financing plans. SoftBank needs to raise a vast war chest to fund its proposed investments in AI, including around $30bn on ChatGPT creator OpenAI.
Yoshimitsu Goto, SoftBank’s chief financial officer, said: “I can’t say if we’re in an AI bubble or not.”
He added the stake sale was “nothing to do with Nvidia itself”.
Tomoichiro Kubota, an analyst with Matsui Securities, said: “The company appears to have sold off Nvidia and bet everything on OpenAI — and investor opinions on this move are divided.” Here is what you need to know.
5 things to start your day
- Net zero goals mean Britain risks missing out on gas price crash | Supplies of LNG expected to swell as new facilities come online in the US and Qatar
- Bank of England claims money-printing spree saved £125bn | Quantitative easing aided public finances by pushing down borrowing costs, says Governor
- Number of benefits claimants who never have to work hits 4m for first time | More than a million foreigners receive Universal Credit, official figures show
- Asda market share hits record low as supermarket’s sales slide | Retailer suffers 20th consecutive month of decline as chief marks year in charge
- Apple caves to China demands to remove gay dating apps | iPhone maker complies with orders from Beijing’s internet regulator to take down Blued and Finka
What happened overnight
Asian shares mostly as the US shutdown neared an end and after fresh jobs data boosted the chances of a third successive Federal Reserve interest rate cut.
Japan’s benchmark Nikkei 225 added 0.4pc to finish at 51,063.31.
SoftBank Group’s shares fell 3.5pc, plunging as much as 10.1pc earlier in the day, after it said Tuesday that it sold its entire stake in the AI chip company Nvidia for $5.8bn last month.
Elsewhere in Asia, Hong Kong’s Hang Seng rose 0.8pc to 26,913.90, while the Shanghai Composite edged up less than 0.1pc to 4,006.17.
Australia’s S&P/ASX 200 shed 0.2pc to 8,799.50. South Korea’s Kospi added 1.1pc to 4,151.36.
It comes amid optimism that Washington’s record-breaking shutdown could end as soon as Wednesday, after the US senate passed temporary legislation to reopen the government.
Despite this, US stocks were mixed at market close. The Dow Jones Industrial Average climbed 1.2pc and the S&P 500 was up 0.2pc, but the tech-heavy Nasdaq Composite stumbled by 0.2pc as concerns mount over valuations in the artificial intelligence industry.
Stocks were dragged down by tech players such as Nvidia, with shares in the chipmaker closing down by around 3pc after Japan’s SoftBank sold its entire stake in the business.
Elsewhere, gold prices rose above $4,100 an ounce during early Wednesday morning trading. Oil held steady, with West Texas Intermediate closing at around $61 per barrel after rising 1.5pc on Tuesday and Brent crude at more than $65 per barrel.
