SoftBank tanks 10% after $5.8-bn Nvidia stock sale

Core Insights - SoftBank sold all its shares in Nvidia for $5.8 billion to free up cash for significant investments in AI, particularly the Stargate project [5][6][7] - The sale reflects SoftBank founder Masayoshi Son's commitment to financing AI initiatives, including investments in OpenAI [5][6][7] - Following the announcement, SoftBank's shares dropped as much as 10%, while Nvidia's shares fell by 3% [5][6] Financial Performance - SoftBank reported a net profit of 2.5 trillion yen ($16.2 billion) in the second quarter, more than doubling due to the rise in AI-related shares [6][7] - The decision to sell Nvidia shares was made to utilize the capital for financing, as stated by SoftBank's CFO Yoshimitsu Goto [6][7] Market Context - The Nasdaq index has surged 25% since May, raising concerns about a potential market bubble in the tech sector [2][5] - Analysts express mixed views on the sustainability of AI valuations, with some warning that current optimism may lead to frothy valuations [7][8]