Nvidia (NVDA) Tumbles as SoftBank Cashes Out $5.8B Stake – Tech Giant Faces Pressure
Nvidia shares took a hit after SoftBank dumped its entire stake in a blockbuster $5.8 billion exit—just as the chipmaker faces mounting competition in AI hardware.
Why it matters: The sell-off triggers fresh doubts about whether Nvidia’s sky-high valuation can hold as Big Tech scrambles to develop in-house alternatives.
The backstory: SoftBank’s Vision Fund had held NVDA shares since 2017, turning its original $3B position into a near-double. Now the cash-out fuels speculation that even bullish investors see peak gains behind them.
Between the lines: Wall Street’s ‘greater fool’ theory lives on—someone always buys the top. This time, it was SoftBank selling to… well, you.
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The Masayoshi Son-led firm divested 32.1 million Nvidia shares in October 2025, as part of a strategic portfolio rebalancing aligned with its growing focus on artificial intelligence (AI). SoftBank also announced a four-for-one stock split of its common shares, effective January 1, 2026, to make them more accessible to retail investors and improve market liquidity.
Alongside the Nvidia sale, SoftBank liquidated part of its stake in American telecom giant T-Mobile (TMUS) for $9.17 billion. The news came as the company released its second-quarter fiscal 2025 results. Net profit more than doubled to $16.6 billion, mainly driven by strong gains of $19 billion in its Vision Fund, propelled by its investment in OpenAI () and proceeds from the NVDA and TMUS transactions.
SoftBank’s History with Nvidia
This is not SoftBank’s first major divestment from Nvidia. The company was among the earliest institutional believers in Nvidia’s AI potential, amassing roughly a $4 billion stake in 2017. However, by January 2019, SoftBank had sold its entire Nvidia position, just before the chipmaker’s meteoric rise to a trillion-dollar valuation in subsequent years.
Despite the latest sale, SoftBank remains deeply connected with Nvidia through various AI initiatives. It plays a key role in the $500 billion Stargate project, an initiative to build AI-focused data centers across the U.S., which relies heavily on Nvidia’s high-performance GPUs (graphics processing units).
Broader AI and Robotics Push
Beyond its Nvidia involvement, SoftBank continues to expand its influence in the AI and semiconductor industries. It owns a majority stake in British chip designer Arm Holdings (ARM), and has major investments in OpenAI and Oracle (ORCL).
Recently, SoftBank acquired ABB’s robotics division in a deal valued at roughly $5.4 billion. This acquisition, expected to close by mid to late 2026, is part of SoftBank’s strategy to integrate AI with robotics, marking a renewed focus on physical AI and robotics innovation.
NVDA Stock Faces High Volatility
Nvidia stock has witnessed significant volatility recently, with shares declining 4.5% over the past five trading sessions amid investor caution about stretched tech valuations. Over the past month, however, Nvidia stock has risen sharply, from around $180 to nearly $199.05 per share, and briefly touching a new 52-week high of $212.19. The rally lifted Nvidia’s market capitalization above $5 trillion, reinforcing its dominant standing in the global semiconductor market.
This rally is supported by strong investor confidence driven by Nvidia’s dominant position in the AI chip market, the growing demand for its GPUs (graphics processing units), and positive revenue growth forecasts.
Is NVDA Stock Still a Good Buy?
On TipRanks, NVDA stock has a Strong Buy consensus rating based on 37 Buys, one Hold, and one Sell rating. The average Nvidia price target of $237.21 implies 19.2% upside potential from current levels.
