If you’re looking for a growth stock investor to follow, look no further than Masayoshi Son, CEO and largest shareholder of SoftBank (OTC: SFTBF), a large diversified holding company based in Japan. would be difficult to find.
Son’s most famous investments include Alibaba, Yahoo, Uber, DoorDash, WeWork, and Arm Holdings. (arm -5.59%)Softbank holds approximately 90% of the shares.
The investment in chip design company Arm, which went public last year, was one of the best investments in SoftBank’s history. SoftBank took the company private in 2016 for $32 billion, and its stake is now worth about $130 billion. Since its IPO last September, the stock price has soared on the back of AI-related demand and strong growth in the smartphone market.
My son also invested in Nvidia. (NVDA -3.26%) However, the company unfortunately sold its 5% stake in chip stocks in 2019 and is now finding further opportunities in the AI field. SoftBank was one of several investors who participated in OpenAI’s latest funding round, investing $500 million in the ChatGPT creator as part of a round that valued the startup at $150 billion.
Son also made bold statements about the future of AI at a recent conference.
Image source: Getty Images.
Is Nvidia undervalued?
Speaking at the Future Investment Initiative, Son said, “I think Nvidia is undervalued.” He went on to explain that bearish estimates predict that artificial general intelligence (AGI) will only account for 5% of GDP in 10 years, equivalent to $9 trillion based on projected GDP growth. did.
In his view, this means that there will be $9 trillion in capital expenditures for these chips and data centers, and that AGI running on that infrastructure will generate $9 trillion in annual revenue at a 50% net profit margin. means that you can. That means a profit of $4.5 trillion.
Son also said it would take 200 million chips to get there and 400 gigawatts of electricity, more than the United States currently uses.
It may seem far-fetched, but most technology revolutions look that way beforehand.
Lessons learned from Masayoshi Son’s investments
SoftBank’s top executives are known for their failures as well as their successes. He was a major investor in WeWork before the global coworking business exploded, and lost $11.5 billion on that investment. At one point, he lost $77 billion in paper assets during the dot-com bust, more than anyone in history had lost at the time.
But Son achieved even more success than that. Arm, for example, has made about $100 billion more from SoftBank’s investment in 2015, and made $72 billion at Alibaba after starting with just $20 million.
Growth stocks, especially emerging technology stocks, offer high risk and high return. However, one winner can wipe out many losers, and one big winner can become very rich. After all, you can only lose 100% of your investment in stocks, but given enough time, you can make gains of 1,000%, 10,000%, or even more in rare cases. There is no limit to profits.
Nvidia is too big to be a 10-bagger at the moment, at least not without a very long period of time, but Son also talks about the possibility of artificial superintelligence, which could be 10,000 times smarter. It’s worth listening to. AGI is many times more powerful than humans.
Son also continues to believe Arm is a great investment, pointing to the company’s dominant market share in smartphones and IoT devices, and saying it will soon become an AI-centric company.
If Son is right about artificial general intelligence and the market even approaches the $9 trillion figure he mentioned, Arm and NVIDIA will both be big winners, and there are plenty of other companies out there. I would.
Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has positions in and recommends DoorDash, Nvidia, and Uber Technologies. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
