Is SoftBank's Nvidia Stake Sale a Strategic Shift? AI ETF Theme Wins

SoftBank Group’s shares suffered on Wednesday after the Japanese conglomerate confirmed that it had sold its entire stake in U.S. chip giant Nvidia for $5.83 billion. The proceeds will fund SoftBank’s $22.5 billion investment in OpenAI, the maker of ChatGPT, as mentioned on CNBC.Softbank had to free up capital to back large-scale infrastructure projects like the proposed “Stargate” data center initiative as well.SoftBank’s Strategic ReallocationIn its latest earnings report, SoftBank disclosed that it had sold 32.1 million Nvidia shares in October, marking a major shift in its AI investment strategy. The company also cut its stake in T-Mobile, raising an extra $9.17 billion.Chief Financial Officer Yoshimitsu Goto said during an investor presentation that the move was aimed at maintaining financial strength while exploring new investment opportunities, as quoted on CNBC. Despite the sale, analysts say SoftBank remains closely linked to Nvidia through its broader business interests, as mentioned on CNBC.From Hardware to Software: A Strategic ShiftMost market watchers view SoftBank’s move away from Nvidia not as a retreat from AI, but as a shift toward the next level of the AI value chain, while staying within the realm of Nvidia’s business initiatives. SoftBank’s inclination toward OpenAI shows the Japanese conglomerate’s intent to be a key player across the AI arena, beyond hardware.Rolf Bulk, equity research analyst at New Street Research, noted that while OpenAI is central to SoftBank’s generative AI portfolio, the company’s hardware ambitions continue through its collaboration with Arm on chip designs, as mentioned on a CNBC article.Bottom LineSince SoftBank’s Nvidia stake sale looks like more of a strategic rebalancing of its investments, one should not fear for Nvidia’s valuation. In fact, SoftBank’s greater association with OpenAI shows that the AI investing theme is in fine fettle despite all those bubble fears.Still, the timing of the sale has stirred speculation that SoftBank may see limited upside left in Nvidia’s spectacular rise, as mentioned on Indian Express. Nvidia shares have tripled in value over the past two years. Nvidia shares also hit a $5-trillion market-cap mark lately (read: Best-Performing Leveraged ETFs of October).However, SoftBank looks set to boost its position in artificial intelligence models. This makes AI themed ETFs intriguing bets at present. This is especially true given OpenAI’s several big-ticket deals signed with Big Tech companies (read: OpenAI's Dealmaking Spree Puts These ETFs in Focus).Roundhill Generative AI & Technology ETF CHAT, Global X Robotics and Artificial Intelligence ETF BOTZ and Global X Artificial Intelligence & Technology ETF AIQ are some of the AI-intensive ETFs that can be played now. CHAT, BOTZ and AIQ have gained about 59.2%, 15.6% and 29.4% over the past six months Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Global X Robotics & Artificial Intelligence ETF (BOTZ): ETF Research Reports Global X Artificial Intelligence & Technology ETF (AIQ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks