TOKYO, May 10 (Reuters) - Japanese technology investor

SoftBank Group ( SFTBF ) is expected to slip back into the red

when it reports earnings on Monday despite technology stocks

including Arm Holdings , its core asset,

performing well over the quarter.

Analysts and investors are also eagerly awaiting clues about

new growth investments as SoftBank has ample liquidity and can

monetise its huge holding in Arm.

The share price of Britain-based Arm, in which SoftBank has

a 90% stake, roughly doubled in February after strong earnings

results stoked investor excitement over Arm's anticipated gains

from the adoption of generative artificial intelligence (AI),

but Arm's share price does not feed into SoftBank's profit as it

is a subsidiary.

The performance of SoftBank's other listed assets were mixed

over the quarter - shares in Coupang ( CPNG ) and DoorDash ( DASH )

rose but DiDi Global and Grab Holdings ( GRAB )

fell. The initial public offering (IPO) market remained

subdued, leaving analysts uncertain of the monetisation

prospects for SoftBank's portfolio of unlisted tech startups.

SoftBank is slated to record a net loss of 72 billion yen

($462.70 million) over January-March, according to the average

of two analysts polled by LSEG, compared to a 985 billion yen

net profit in the previous three months.

SoftBank's management has said it is ready to make new

growth investments but has stressed it will adopt a cautious

approach.

New investments were minimal in the October-December quarter

but analysts say a large, controlling acquisition - along the

lines of its $32 billion purchase of Arm in 2016 - could be in

the offing.

SoftBank could fund up to $30 billion by combining its

liquidity at hand as of the end of 2023, the proceeds of bonds

issued in March and by negotiating a margin loan on its Arm

stake, according to calculations by Nomura Securities credit

analyst Shogo Tono.

But while the Arm stake may make possible an investment on

this scale, its dominance within SoftBank's portfolio poses a

risk should market sentiment turn, hitting SoftBank's value and

fundraising capacity.

Currently Arm trades at premium valuations far in excess of

competitors such as Nvidia ( NVDA ) that have pushed it to

constitute almost half of SoftBank's equity value.

Some analysts warn this is unsustainable. Moningstar analyst

Javier Correonero estimates a fair value for Arm of $57 per

share, compared to its recent trading range around $100 per

share.

Investors were disappointed by Arm's annual revenue forecast

at its quarterly earnings on Wednesday, sending its shares

tumbling up to 8.5% the following day and underlining the risk

of a major rerating.

($1 = 155.6100 yen)