SoftBank’s Nvidia Blunder: A $150B Missed Opportunity
SoftBank‘s (TYO: 9984) decision to sell its entire stake in Nvidia (Nasdaq: NVDA) back in 2019 has proven to be a colossal mistake. The Japanese conglomerate sold its Nvidia shares for $3.6 billion, a move that, now in hindsight, has cost the company a staggering $150 billion in potential profits.
Nvidia’s meteoric rise in recent years has been nothing short of remarkable. The chipmaker, as of Tuesday, has surpassed Microsoft (Nasdaq: MSFT) as the world’s most valuable company, with a market capitalization of $3.34 trillion, which grew by nearly double from just the start of the year.
Had SoftBank held onto its Nvidia shares, its investment would have been worth an astonishing $153 billion today.
The decision for Sofbank to sell the Nvidia shares came at a time when the chipmaker was facing headwinds, with its stock price nearly halved in the span of four months. SoftBank’s Vision Fund, which had invested in Nvidia in 2017, opted to dispose of its entire holding, citing concerns over deteriorating macroeconomic conditions, particularly in China.
However, Nvidia’s fortunes took a dramatic turn, fueled by the explosive growth of AI and the increasing demand for chips that power generative AI models like ChatGPT. The company’s sales and profit figures have consistently surpassed analyst expectations, cementing its position as a dominant force in the tech industry.
And speaking of blunders:
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