① Asian-Pacific stock markets fell across the board on Friday, influenced by the sharp decline in US stocks. The Nikkei 225 index closed down 2.4%, with SoftBank Group's stock price falling by 10.9%. ② Although SoftBank has sold Nvidia... The company owns shares in Arm Holdings but still holds shares in Arm Holdings and is involved in several AI projects that use Nvidia products. It also issued 46 billion yen in bonds today to fund future AI investments.
Asian stock markets fell across the board on Friday (November 21). Japan's benchmark Nikkei 225 index closed down 2.4%, with heavyweight SoftBank Group falling 10.9%, the last time it had fallen by more than that in a single day was on August 5 last year.
Analysts believe that the pressure on Asia-Pacific stock markets was mainly due to the negative impact of the overnight plunge in US stocks. In early trading on the US stock market, the Nasdaq... The composite index rose nearly 2.6% at one point due to Nvidia 's earnings report, but closed down 2.15%.
Analysts explained that with the US jobs report showing mixed results, the market is concerned about the Federal Reserve's resolve to continue cutting interest rates. Additionally, Nvidia's earnings report exacerbated concerns about overvaluation and technical dynamics, potentially prompting short-term selling.
Billy Toh, an executive at CGS International Securities, said that Nvidia is a victim of a combination of adverse factors, including a sell-off in Bitcoin, the possibility that the Federal Reserve may delay interest rate cuts, and a general tightening of financial conditions.
"Plus, regarding artificial intelligence" The ongoing discussion of an (AI) bubble has triggered broader risk aversion, naturally making Nvidia one of the first stocks to come under pressure.
Among the Nikkei 225 index constituents, the top three decliners were Mitsui Metals (-12.28%), Advantest (-12.1%), and SoftBank Group. Mitsui Metals produces high-end electrolytic copper foil, a raw material for Nvidia server chips.
Advantest is a major supplier of test equipment for Nvidia. Fujikura (-8.28%), Tokyo Electron (-7.14%), and Disco (-7.07%), which are among the top ten decliners, are also Nvidia's partners.
Although SoftBank Group recently announced the sale of all its Nvidia shares, it still holds a stake in British chip design company Arm Holdings. Arm provides chip architecture and design for Nvidia, and its stock closed down more than 3.26% yesterday in the US stock market.
In addition, SoftBank has participated in several AI projects using Nvidia products, including a $500 billion deal with OpenAI and Oracle. Giant US data centers, etc. The project is called "Stargate".
Since September of last year, SoftBank has been heavily investing in OpenAI. In March of this year, SoftBank finalized its initial investment of $40 billion in OpenAI. In October, it signed a revised agreement with OpenAI, adding another $22.5 billion to its investment.
Recently, the high-value investment and procurement relationship between OpenAI and Nvidia has raised questions about "circular transactions." Stifel analyst Ruben Roy stated, "Concerns about the lack of sustainability in the growth of AI infrastructure spending are unlikely to subside."
Earlier today, SoftBank Group announced the issuance of 46 billion yen (approximately US$292 million) in bonds, bringing its total bond issuance this year to approximately 400 billion yen, a record high. Analysts believe this move by SoftBank is preparing ammunition for further AI investments.
It is worth noting that SoftBank's bond issuance comes at a time when Japanese government bond yields have risen sharply, which means that SoftBank may have to pay higher interest rates for these bonds.
(Article source: CLS)
