Full Exit of Nvidia? How Much Did SoftBank Make? Outlook and Options Strategies
Hello everyone, I'm Steven.
The most explosive news regarding NVIDIA over-nights is undoubtedly SoftBank's complete liquidation of its position. Not a reduction, but a full exit.
According to $SoftBank Group (ADR) (SFTBY.US)$ 's quarterly financial report, the company sold all of its remaining $NVIDIA (NVDA.US)$ shares in Q3 – over 30 million shares, amounting to $5.8 billion. By the end of the quarter, its NVIDIA share count had dropped to zero. This announcement triggered a 3% drop in NVIDIA's share price during yesterday's trading session, with an intraday decline exceeding 4%.
So, how much did SoftBank make? Does this exit signal NVIDIA stock price's peak? How to trade Nvidia's options? This article breaks it down.
1. How Much Did SoftBank Make on Nvidia?
It's not the first time SoftBank liquidates Nvidia. Prior to this time, SoftBank executed a similar full exit back in Q1 2019. Worth to note that following its exit, NVIDIA's price soared from around $30 to over $300 in the subsequent three years – meaning SoftBank missed the bulk of that rally.
After holding zero NVIDIA shares for nearly three years, SoftBank re-entered the position in Q4 2021, purchasing 10.51 million shares, among a price range from 195 to 345. Given the share price then is close to its historical high, it's reasonable to suspect this move was an attempt to recapture some gains after missing out the earlier major uptrend.
In other words, FOMO!!! ![]()
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After this purchasing, Nvidia began to fall, along with the market slump. Yet it did not sell any share during the whole year of 2022. It held onto these ~10 million shares through the significant 2023-2024 rally, which contributed to its major profit. Then, during the Q1 2025 market plunge, SoftBank increased its position significantly to 30.5 million shares. Now, in Q3, SoftBank has liquidated its entire NVIDIA holding, bringing its holdings back to zero.
Based on an analysis of the SoftBank's holdings, assuming all the Q1 2025 purchases were made at the quarter's lowest price (~$103) and the liquidation occurred at Q3's peak (~$187), and combining this with the cost basis from the Q4 2021 purchase (assumed at the quarter's low of ~$19.5), SoftBank's average profit per share of NVIDIA is approximately $111.8. With 30.5 million total shares, the total profit amounts to roughly $3.41 billion.
2. Mr. Son bearish on Nvidia?
For many investors, SoftBank's full exit might shake their confidence in NVIDIA, and the market reaction – a 3% drop – reflects this. However, it's important to note that commentaries regarding this move generally suggest SoftBank is reallocating capital, potentially to improve its money efficiency by supporting its investments in OpenAI, rather than signaling a loss of faith in NVIDIA's long-term prospects.
Conversely, some analysts argue that with growing skepticism about the AI computing power bubble, demand for data center chips might enter a period of stagnation, potentially leading to a volatile or even mildly corrective phase for NVIDIA's stock price.
3. Options Trading Strategies
Since hitting $212 on October 29th, pushing its market cap past $5 trillion, NVIDIA's stock has entered a pronounced downtrend. It fell to a low of $178 on November 7th, a peak-to-trough decline of about 14%. While the price has since rebounded above $190, pressure from negative news like SoftBank's exit, combined with typically elevated volatility ahead of earnings, makes a decisive break-through above $212 challenging in the near term.
Therefore, we can tentatively define a trading range between $180 and $220 as the upper and lower bounds for NVIDIA's current consolidation and thereon base our option strategies.
(1) Short Side Strategies
NVIDIA's implied volatility (IV) typically rises ahead of earnings and is currently around the 67th percentile historically. This presents an opportunity to bet on IV contraction post-earnings.
Combined with the range-bound assumption, investors can consider selling puts when the stock approaches the lower end of the range. Investors can set strikes between $140-$150 with expiries around 4 months, which makes a reasonable margin of safety.
Conversely, when the stock rallies towards the range's upper end, investors might sell calls with strikes around $260-$280, opting for 2-3 month expiries.
(2) Long Side Strategies
Generally, buying options when IV is elevated is less favorable due to higher time value decay. However, given NVIDIA's recent sharp price swings, long options can still yield substantial profits if directional moves are correctly anticipated.
For instance, last Friday, NVIDIA hit a low of $178, but by Monday, it had rallied to a high of $199 – a $21 swing representing over a 10% move. Capturing such moves with long calls could be highly profitable.
An even larger swing occurred the prior week. From November 3rd to 7th, the stock fell from $211 to $178 – a 16% drop over five sessions – offering ample profit potential for long puts.
For these short-term, high-volatility trades, option selection isn't overly complex. At-the-money or slightly out-of-the-money options with 1-2 months to expiration are commonly used.
However, traders must be cautious: these short-term speculative bets can lead to significant losses if the direction is wrong. Setting and strictly adhering to stop-loss principle is essential.
That wraps up our NVIDIA analysis for this week. Earnings are scheduled for next Wednesday after-hours. Stay tuned for Steven's outlook on earnings and option strategies. Until next time~![]()
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Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Rockyturki : Thanks for the detailed breakdown, Steven! Great analysis on the profit math and market impact.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Shaaaw : With SoftBank out, do you think NVIDIA’s rally is truly over, or is this just a temporary dip?
frankinglily : If I’m holding NVIDIA shares long-term, should I be worried about SoftBank’s exit signaling a broader AI hardware slowdown?
VinceYeo : Good analysis and yes FOMO is the word. Personally I am amazed by the amount of people who are worried just because of softbank exit... Really clueless and a pity for those who exited as well because of it. It goes to show their lack of understanding of the AI ecosystem and the huge potential still to come..
溫馨提示 : cnbc said after sell 5 b Nvda softbank plunged 10 % lol (let him die![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Pulniamore : stiven, tonight go 210![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
StockAmateur : Softbank will move to CoreWeave
104144191 : SoftBank want to take profit first. Then create FOPO (Fear of panick out) to alot of investor. Once the price hit the low, SoftBank will slowly buy back at cheap price.
CheV971 : So basically, SoftBank screwed up worse than retail investors by existing early years ago and more than likely have done so again.
PJ Guy : Softbank will regret later. They probably have amatures running the show
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