SoftBank has almost fully pulled out of Alibaba stock

SoftBank says it has almost entirely pulled out of Alibaba Group Holding Ltd (NYSE: BABA). Shares of the Chinese tech titan are still up some 4.0% on Monday. 

SoftBank has been investing in Arm instead

Alibaba now accounts for “almost zero” percent of the net asset value at SoftBank – down massively from 48% in 2020. 

The Japanese conglomerate is now investing more aggressively in artificial intelligence. Arm Holdings PLC (NASDAQ: ARM), for example, makes up 45% of its net asset value at writing. According to Yoshimitsu Goto – the chief financial officer of SoftBank:

This shows a shift to an AI-centric portfolio. Arm is core to our shift to AI and the assets held by us and the SoftBank Vision Fund.

SoftBank is currently a majority owner of the British chip designer. 

Alibaba will report quarterly earnings tomorrow

SoftBank ended its fiscal 2023 with realised and unrealised valuation losses of about ¥960 billion related to its position in $BABA. 

The news arrives only a day before Alibaba is scheduled to report its financial results for the fourth quarter. Consensus is for it to earn 92 cents a share versus $1.15 per share a year ago. 

Ahead of its earnings report, Youssef Squali – a Truist analyst lowered his price target on Alibaba stock to $113. That still, however, suggests about a 35% upside from here. 

Note that the company based out of Hangzhou, China also currently pays a dividend yield of 1.18% which makes up for another good reason to have it in your investment portfolio. 

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