SoftBank’s Nvidia Mistake: A $150 Billion Missed Opportunity

SoftBankIt is (TYO: 9984) decision to sell its entire stake in Nvidia (Nasdaq: NVDA) in 2019 turned out to be a colossal mistake. The Japanese conglomerate sold its Nvidia shares for $3.6 billion, a move that, in hindsight, cost the company a whopping $150 billion in potential profits.

Nvidia’s meteoric rise in recent years has been nothing short of remarkable. The chipmaker on Tuesday surpassed Microsoft (Nasdaq: MSFT) as the most valuable company in the world, with a market capitalization of $3.34 trillion, which has almost doubled since the start of the year.

If SoftBank had held on to its Nvidia shares, its investment would have reached an astonishing $153 billion today.

Sofbank’s decision to sell Nvidia shares came at a time when the chipmaker was facing headwinds, with its stock price nearly halving in the space of four months. SoftBank’s Vision Fund, which invested in Nvidia in 2017, chose to sell its entire stake, citing concerns about deteriorating macroeconomic conditions, particularly in China.

However, Nvidia’s fortunes have taken a dramatic turn, fueled by the explosive growth of AI and increasing demand for chips that power generative AI models like ChatGPT. The company’s sales and profit figures have consistently exceeded analysts’ expectations, cementing its position as a dominant force in the technology industry.

And speaking of blunders: