SoftBank (TSE:9984) Stock Looks Fairly Priced As AI Funding Risk Grows

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SoftBank (TSE:9984) Stock Looks Fairly Priced As AI Funding Risk Grows Bailey Pemberton Tue, September 1, 2026 at 9:08 PM EDT 4 min read 9984.T 9984 SoftBank Group stock has delivered a very strong 3 year return, yet current valuation checks send a mixed signal, with the Discounted Cash Flow (DCF) intrinsic value estimate pointing to a roughly fair price while earnings based multiples still screen the shares as undervalued. After such a move, the question for investors is whether SoftBank Group is still pricing in enough caution around its complex AI and financing exposure. The stock has returned 232.3% over the past 3 years, which puts recent enthusiasm under the spotlight of what the business is currently worth. SoftBank Group's push into AI linked assets such as SB Energy and large commitments to OpenAI can support long term cash flow hopes, while the planned retail bond issuance of up to $20b may increase balance sheet risk if conditions change. The broader valuation checks give SoftBank Group a mixed picture rather than a clear bargain or clear overvaluation, with the value score of 4 sitting between cheap and expensive. The issue now is whether SoftBank Group's current share price already reflects the AI driven upside that investors are hoping for, or still offers room relative to its intrinsic value estimate. Compare SoftBank Group's AI focused surge with other potential breakouts by scanning 55 AI infrastructure stocks , which already includes companies building the data centers and infrastructure behind the current headlines. The Discounted Cash Flow (DCF) model estimates what SoftBank Group might be worth based on projected future cash flows. For the latest twelve months, the company reported free cash flow of about ¥2.1b in outflows, with the model assuming that cash flows recover and turn positive over time. On that basis, the 2 Stage Free Cash Flow to Equity framework arrives at an estimated intrinsic value of about ¥5,510 per share. Compared with the current share price, this implies the stock is only about 4.5% undervalued, which points to SoftBank Group trading close to what its cash flows support rather than at a steep discount. SoftBank's planned retail bond sale of up to $20b to fund AI related investments helps explain why the market is not giving a larger valuation gap despite the recovery assumptions in the cash flows. Overall, the DCF workup suggests SoftBank Group looks roughly fairly valued on a cash flow basis. SoftBank Group is fairly valued according to our Discounted Cash Flow (DCF) , but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for SoftBank Group. P/E is a useful cross check for SoftBank Group because it anchors the current share price to the profits the group is already reporting. SoftBank Group currently trades on a P/E of 6.1x. That is well below the Wireless Telecom industry average of about 15.2x and also below the broader peer average of 19.4x. On Simply Wall St's blended fair P/E estimate of 11.7x, which attempts to balance SoftBank Group's business mix, size and risk profile, the stock trades at a sizeable discount to what this framework would expect. Even after the strong three year share price move and rising attention on its AI exposure, the current earnings multiple still prices SoftBank Group well under both sector norms and this tailored fair ratio. On the P/E multiple, SoftBank Group stock appears undervalued relative to both its sector and the fair ratio implied by its fundamentals. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for SoftBank Group pick up where the valuation checks leave off and explain what would need to occur in SoftBank Group's growth, margins and earnings for the stock to be worth materially more or less than it is today on the market. Rather than stopping at a single ratio or model output, they describe the future that number assumes so you can monitor whether SoftBank Group's actual progress remains aligned with it over time on the Community page. Community views on SoftBank Group are wide apart, with some investors focused on AI upside and others worried about concentration and balance sheet risk. "SoftBank's close alignment with long-term AI secular growth, demonstrated by investments in Arm, OpenAI, and numerous AI-focused Vision Fund portfolio companies, could drive significant gains in NAV and future earnings as AI adoption and automation accelerate globally…" Read the full Bull Case to see why SoftBank Group could be undervalued "The market may still price SoftBank primarily as a volatile holding company with legacy perceptions, but its evolving AI positioning, spanning chips, data centers, robotics, and frontier models, suggests a strategic transition toward a high-conviction AI platform…" Read the full Bear Case to see why SoftBank Group could be overvalued Do you think there's more to the story for SoftBank Group? Head over to our Community to see what others are saying! For SoftBank Group, the Discounted Cash Flow (DCF) work suggests the stock is close to its intrinsic value, with only a modest discount implied. The P/E view still points to an undervalued stock relative to peers, which sits awkwardly beside the more restrained overall valuation checks. That split largely comes down to how you weigh future cash flow needs and financing risk against current earnings power and AI exposure. The key question from here is whether SoftBank Group can turn its AI and infrastructure bets into durable, growing cash flows that justify both the balance sheet commitments and any re rating in the multiple. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include 9984.T . Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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