To The Moon

We saw SoftBank exiting from its $5.83 billion of Nvidia share, and we are going to have Nvidia earnings soon, SoftBank is getting this money to fund its investments in other artificial intelligence (AI) companies and initiatives. There are some AI software, robotics, chip design companies in SoftBank AI invested companies.

So in this article we would like to example the signals and rotation implications which might possibly happen. There are definitely several signals and rotation implications that emerge from SoftBank Group Corp.’s exit from its stake in NVIDIA Corporation (≈ US$5.8 billion) that we should unpack, particularly in view of upcoming $NVIDIA(NVDA)$ earnings.

Key Signals From SoftBank’s Exit

Here are the main takeaways:

Capital recycling / funding major AI bets SoftBank sold its entire ~32.1 m share holding in NVIDIA for roughly US$5.83 billion in October. According to SoftBank’s CFO, the sale was not about any negative view of NVIDIA per se, but rather freeing up capital for large-scale AI investments incl. with OpenAI LLC and its “Stargate” infrastructure project.

→ Signal: SoftBank is redirecting from a highly visible platform play (NVIDIA) into more bespoke infrastructure, AI applications, ecosystem plays.

Valuation/distribution risk acknowledgment The move is also seen by market watchers as a hint that SoftBank may view NVIDIA’s valuation as near or at a high (or at least they prefer to lock in gains) — though not necessarily a negative on the business. For example:

“The timing of its sale deepened some investor doubts that valuations in the AI industry might have gotten ahead of fundamentals.”

→ Signal: The market might be entering a phase where “platform/semiconductor” bets get trimmed in favour of more specialized downstream players. Also a reminder of execution risk, dilution and competition.

Wider investor caution / AI “bubble” talk The sale triggered a sell-off in SoftBank’s shares and a drop in NVIDIA’s share price (albeit modest) because the exit stirred concerns that the AI growth story may be facing margin/compression or that investor sentiment may be shifting.

→ Signal: Risk-on bets might be under review. The “easy upside” may be partially in the rear-view mirror; therefore, market may rotate toward less crowded parts of the AI chain.

Focus on infrastructure & applications rather than just chips SoftBank’s pivot appears to go beyond just chips: investing in data centres, AI models, robotics, “physical AI” etc. For example they’re planning huge commitments to OpenAI and its associated project.

→ Signal: Upstream (chip) players may still benefit, but midstream/downstream (software, systems, services, robotics) might be where the incremental dollars go — i.e., potential rotation.

Portfolio / Sector Rotation Ideas

Given this news and broader dynamics, here are potential rotations and tactical ideas:

From pure play “AI-chips” to ecosystem / applications: Since SoftBank is redirecting capital toward AI models, infrastructure, robotics, chip design companies, it suggests that some of the investment growth may shift from companies like NVIDIA toward companies in the “stack” above or adjacent to chips. E.g., AI software platforms, model-builders, specialized chip design firms, robotics/automation integrators.

Look at “second-tier” AI hardware / chip-design plays: While NVIDIA remains dominant, competition and supply chain diversification might benefit companies that serve AI training/inference infrastructure (e.g., companies designing custom accelerators or “AI server” ecosystem). SoftBank’s interest might signal where the next bets are.

Infrastructure & data-centres, AI workloads beyond training: SoftBank’s move into “physical AI”, robotics, infrastructure suggests that companies enabling deployment (data-centre builders, edge compute, robotics) might see more capital flows. This could be a rotation from pure hyperscaler exposure to infrastructure build-out.

Risk management: consider “crowded trade” risk: If the market recognises that platforms like NVIDIA might have less upside or more downside risk (valuation, execution, competition), then rotating into less-crowded names might be prudent. The news has some “bubble caution” tones from analysts.

Geographic / regulatory diversification: SoftBank is Japanese, but with global play in AI. Some investors might look to companies outside of U.S.+China axis for AI exposure (Japan/Europe infrastructure, robotics, etc).

High-level “Signal Summary”

SoftBank is not exiting AI; it's exiting a major chip-investment to redeploy into broader/bigger AI bets.

This indicates possible rotation from hardware platform (chip) companies toward software/models/integrators/infrastructure within the AI ecosystem.

For NVIDIA, the sale does not necessarily signal trouble, but it does increase scrutiny: valuations, growth, margin sustainability all matter more now.

For investors: this could be a moment to reassess where the incremental dollars in the AI build-out might go (and which parts may have more runway vs those that might be getting ahead of themselves).

In the next section, we have ran the evidence and mapped out who is likely to benefit if capital rotates away from a giant chip-platform like NVIDIA into the rest of the AI stack, with some semiconductors in Singapore/ASEAN as well.

1. Big-Picture Beneficiaries (Global)

These are categories and representative companies that typically gain when large investors recycle chip gains into the wider AI ecosystem.

A. AI infrastructure & data-centre operators / specialist cloud providers

Why: SoftBank is funding “Stargate” and new hyperscale AI data-centre capacity; that increases demand for data-centre services, colocation, GPU hosting, and specialised AI cloud partners (CoreWeave, etc.).

B. Chip-design / accelerator firms (non-NVIDIA)

Why: SoftBank wants diversified supply and bespoke accelerators — firms that design AI accelerators or provide CPU/GPU alternatives (Ampere, Arm-licenced firms, Marvell, etc.) can attract capital. SoftBank has been acquiring/targeting chip assets (Ampere).

C. Robotics & “physical AI” companies

Why: SoftBank explicitly doubled down on robotics (ABB robotics acquisition, prior robotics portfolio). That makes industrial robotics, warehouse automation and robot integrators beneficiaries.

D. AI software / model & enterprise AI players

Why: Funding OpenAI / models & apps means more dollars to companies building or embedding models, enterprise AI platforms, and tooling (MLOps, model providers). Many of these are private, but public analogues include $Palantir Technologies Inc.(PLTR)$, $C3.ai, Inc.(AI)$ , $Datadog(DDOG)$ (tooling), cloud vendors.

2. Specific Companies Worth Watching (Global + Rationale)

(These are illustrative — check valuations and earnings before trading.)

• Arm (SoftBank legacy / design/IP) — core to chip design and to any regional chip roadmap; SoftBank has strong strategic interest in Arm technology. (strategic rationale).

• Ampere / other server-CPU designers — SoftBank had been linked to Ampere deals; server CPUs / accelerators matter for AI scale.

• CoreWeave / AI cloud specialists (private/public peers) — direct beneficiaries for GPU hosting capacity and Stargate partnerships. $CoreWeave, Inc.(CRWV)$

• Large enterprise AI / tooling names (public proxies): Palantir, C3.ai, Datadog — platform and tooling plays that could capture spend as models get deployed. (general market observation).

3. Singapore / ASEAN — Public Names with Visibility and Accessible Valuations

Below are Singapore / regional names that investors in Singapore commonly use for AI / robotics / semiconductor exposure. I list ticker / rationale and a short watch point.

Semiconductor / test / manufacturing services (best direct ASEAN exposure)

AEM Holdings (SGX: AWX) — semiconductor & electronic test systems; visible on SGX and often cited as a local semiconductor play. Watch: revenue leverage to AI/semiconductor demand cycles.

UMS Integration (UMS) — precision manufacturing & test services for semiconductor customers; mentioned by local brokers as a recovery beneficiary. Watch: order book & customer mix.

Frencken Group (SGX: E28) — EMS/semiconductor-related manufacturing; highlighted by brokers as a Singapore tech/semicon pick. Watch: customer wins and margin recovery.

(Why These Matter) — SoftBank’s push into AI infrastructure and global semiconductor investment increases demand for ATE/OSAT/EMS services across Asia; Singapore firms that serve that supply chain can see order ramps.

Robotics & Automation (Singapore / Regional Companies)

Fourier Intelligence / local robotics start-ups (private) — Singapore has many robotics players; SoftBank’s ABB buy signals capital available for robotics M&A and partnerships.

Automation / systems integrators listed regionally (eg. companies offering warehouse automation / robotics integration) — look for listed integrators or suppliers (some appear on SGX or Bursa). Watch: contract wins, partnerships with ABB/SoftBank portfolio.

AI / Software / Platform Exposure (Regional Public Names)

Grab Holdings (NASDAQ: GRAB) — SEA superapp using AI across routing, fintech, delivery; very visible to Singapore investors. Watch: monetisation of AI features, margins, cloud costs.

Sea Limited (NYSE: SE) — big regional digital ecosystem (gaming, e-commerce, cloud); AI adoption in gaming and cloud services could be a beneficiary. Watch: cloud growth & profitability.

How We Can Make A Quick Checklist

Revenue exposure to AI capex or hyperscaler spend — direct supplier (AEM, UMS) vs indirect (integrator).

Orderbook / backlog and guidance — the quickest confirmation of rotation materialising.

Valuation vs growth — many regional small-caps have mid/low valuations (PE multiples) so compare FY-1 EV/EBITDA vs peers. (local broker notes highlight AEM/Frencken as reasonable).

Partnerships / contracts with hyperscalers or SoftBank portfolio — any disclosed deal with data-centre builders, ABB/SoftBank entities, or OpenAI partners is high-conviction.

How We Can Do Tactical Ideas Depending On Our Risk Profile

Thematic basket: small allocation to an ASEAN semicon/EMS basket (AEM + UMS + Frencken) to capture regional AI capex recovery. (liquidity/volatility caveat).

Robotics/automation watchlist: screen integrators / suppliers that could win ABB business or supply ABB’s manufacturing lines once the acquisition closes.

Pairs / rotation play: trim mega-cap NVIDIA exposure and redeploy a portion to an AI-software platform (Grab/Sea for regional AI adoption) + small cap semiconductor exposure for higher beta into the AI cycle. (strategy suggestion).

Some Caveats To Consider

SoftBank’s sale of NVIDIA stock is capital recycling — not necessarily a negative on NVIDIA (they explicitly said funds will be redeployed into AI). Market reaction can be short-term and sentiment driven.

Many high-conviction AI investments remain private (OpenAI, Anthropic, Databricks). Public companies will get secondary flows, but private market allocations can mute how much flows into listed stocks. Business Insider

Local/ASEAN names often have smaller market caps and higher execution risk; watch liquidity and corporate governance disclosures carefully.

Implications for NVIDIA Earnings & What To Watch

Given the exit and the upcoming earnings from NVIDIA, here’s how you might interpret signals and what to watch for in their report:

Margin trends / demand outlook: If key customers are delaying cycles (we’ve already seen some commentary about client delays e.g. from CoreWeave Inc.).

If they raise guidance / show strong backlog → may validate the platform growth narrative. If not, might underline the risk of a shift.

Capital expenditure and inventory build: The sale suggests some large investors believe chips may be somewhat “priced in.” If NVIDIA signals slower growth or more cautious inventory, this may confirm rotation.

Comments on ecosystem and downstream consumption: If NVIDIA emphasises software + application growth, that might resonate more given SoftBank’s shift. If they stick rigidly to hardware story, could signal more of the same.

Customer diversification & competition: With SoftBank pivoting infrastructure, the question becomes: how much of NVIDIA’s growth is tied to the very large hyperscalers vs broader enterprise adoption. Any hint of “saturation” or longer sales cycles may matter.

Refer to the next article for Part 2 on [2/2] How SoftBank's $5.83B Sales Interacts With NVIDIA’s Upcoming Earnings

Summary

SoftBank’s sale of its US$5.83 billion stake in Nvidia ahead of Nvidia’s upcoming earnings sends several key market signals. Strategically, SoftBank is not abandoning AI—it is rotating capital from a mature AI hardware leader into the next wave of AI growth, including software platforms, robotics, and chip-design startups. This aligns with SoftBank’s push to back AI ecosystem players through its Vision Fund and new initiatives such as “Stargate,” focused on large-scale AI infrastructure and model development.

For Nvidia, the move raises the bar for its earnings expectations. Investors will closely watch whether the company can maintain its exceptional growth in data-center GPU sales, sustain margins, and expand its ecosystem beyond hardware. The sale may also hint that large investors see valuation risks or expect slower hardware growth as competition rises and AI spending diversifies across the value chain.

Market-wise, this rotation could trigger capital inflows into smaller AI-related sectors—such as semiconductor suppliers, robotics automation, and AI software—where valuations are lower and growth potential remains strong. While Nvidia remains a dominant force, the signal from SoftBank suggests that the next investment frontier may lie in AI enablement and applications, not just compute hardware.

In short, SoftBank’s exit is less a vote against Nvidia and more a rebalancing toward broader AI exposure, highlighting a potential market rotation from hardware to software, robotics, and chip innovation ahead of a critical earnings test for Nvidia.

Appreciate if you could share your thoughts in the comment section whether you think SoftBank sales of Nvidia shares is more of a strategic move to rotate into other AI investments within the ecosystem or Nvidia growth might be slowing due to rotation from hardware to software.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.