SoftBank (SFTBY) Stock Climbs Nearly 1% Amid Rumors of Switch Acquisition Talks

SoftBank's stock just got a jolt—and the market's buzzing about a potential mega-deal.

The Catalyst: Acquisition Whispers

Shares of SoftBank Group Corp. ticked up nearly 1% in recent trading. The move wasn't driven by earnings or a new fund. Instead, traders are reacting to chatter—unconfirmed reports swirling about the Japanese conglomerate being in talks to acquire data center giant Switch.

Why This Matters

For SoftBank, it's a potential power play beyond its famed Vision Fund. Snagging Switch would plunge the firm deeper into the infrastructure of the digital economy—the physical backbone that makes cloud computing and AI possible. It's a bet on the bricks and mortar of the future, not just the software.

The market's initial, tentative thumbs-up suggests investors see strategic logic. But whispers don't pay the bills, and SoftBank's history is a rollercoaster of bold bets and brutal corrections. This potential move feels like another classic Masayoshi Son swing for the fences.

The Bottom Line

A sub-1% pop is hardly a victory lap. It's a cautious nod from a market that's learned to treat SoftBank headlines with a mix of awe and skepticism. If the talks are real, the real drama—and the real numbers—are yet to come. After all, in high-finance, sometimes the most expensive thing you can buy is a rumor.

TLDRs;

• SoftBank’s stock rises almost 1% amid potential $50B Switch acquisition, signaling expansion into AI infrastructure.
• Switch prepares for IPO while negotiating with SoftBank, with valuation expectations reaching $60 billion.
• Texas data center expansions position Switch for future growth and opportunities for construction suppliers.
• SoftBank pursues strategic AI and data center moves, including Ampere Computing and ABB robotics deals.

SoftBank Group’s shares gained nearly 1% on Thursday following reports that the Japanese conglomerate is exploring a potential acquisition of Switch, a US-based data center operator. The MOVE signals SoftBank’s growing interest in expanding its footprint in AI infrastructure, a sector that has attracted substantial investment globally.

Sources familiar with the discussions confirmed that while SoftBank has conducted due diligence and held preliminary talks with Switch, no formal agreement has been finalized. Market analysts suggest that the announcement alone reflects investor Optimism about SoftBank’s strategic positioning in the fast-growing data center and AI markets.

SoftBank Group Corp., SFTBY

Switch’s Valuation Raises Market Questions

Switch’s owners are reportedly seeking a valuation of roughly US$50 billion, including debt, while also preparing for a potential initial public offering that could push its valuation closer to US$60 billion. This is a significant increase from its $11 billion acquisition by a consortium including DigitalBridge and IFM Investors in 2022.

Industry experts note that Switch’s $50 billion valuation is high compared to peers. For instance, Digital Realty posted $1.4 billion in Q4 2024 revenue with $751 million in adjusted EBITDA, and Equinix reported $2.26 billion in revenue with $1.01 billion adjusted EBITDA.

Switch has yet to publicly disclose revenue or EBITDA figures, making the proposed valuation largely dependent on projected future contracts and customer commitments rather than current earnings.

Texas Buildouts Create Supplier Opportunities

Switch is actively expanding its data center footprint in the US, particularly in Texas. The company is developing new campuses in Round Rock spanning over 32 acres, with additional sites under a mile away.

These facilities are expected to scale to roughly 100 MW, creating opportunities for construction suppliers and power equipment vendors to engage in hybrid air and liquid cooling solutions, high-density power distribution, and electric substation work.

Additionally, Switch has secured long-term agreements to procure up to 12 GW of nuclear power from Oklo reactors by 2044. These deals not only underline the company’s commitment to sustainable energy but also open avenues for grid interconnection specialists and related service providers.

Expansions are also underway in Grand Rapids, Michigan, and Atlanta, Georgia, positioning Switch as a major player in the North American data center market.

SoftBank’s Broader AI and Infrastructure Moves

SoftBank’s interest in Switch aligns with its broader AI and data center strategy. Earlier this year, the conglomerate acquired Ampere Computing for $6.5 billion and proposed a $5.4 billion purchase of ABB’s robotics unit.

In addition, SoftBank is reportedly in talks to acquire DigitalBridge Group, one of Switch’s primary backers, further emphasizing the company’s ambition to strengthen its position in AI and high-capacity data operations.

Analysts suggest that if the acquisition moves forward, it could solidify SoftBank’s role as a key player in AI infrastructure while providing Switch with capital and strategic support to accelerate its growth.

However, with no deal finalized, investors remain cautious, balancing enthusiasm over potential market expansion with concerns about Switch’s high valuation and opaque financials.

Conclusion

SoftBank’s stock performance reflects growing optimism about its strategic positioning in AI and data center markets. While talks with Switch indicate an aggressive expansion strategy, final outcomes remain uncertain.

The next steps, including potential negotiations and regulatory approvals, will be closely watched by investors and industry stakeholders alike.