A 34% rally has made SoftBank Group Corp. the best-performing stock among firms listed on the 225-issue Nikkei average this quarter. But if analysts are right, the tech investor’s shares may not have much upside left.
Shares of the firm founded by Masayoshi Son rose this week to their highest in almost a year, thanks to cost-cutting efforts and a ¥1 trillion ($6.8 billion) share buyback program. The rally added $20 billion to the company’s market value from a recent low in late September.
Yet, problems loom. SoftBank’s most-valuable holding, Chinese internet company Alibaba Group Holding, slumped on Monday to a fresh all-time low in Hong Kong before rebounding. More broadly, the sell-off in U.S. technology stocks is weighing on valuations of the kinds of companies that SoftBank invests in. Meanwhile, the sluggish market for initial public offerings could weigh on Arm, the chipmaker that SoftBank is trying to list.