Shares in Japan’s SoftBank Group tumbled over 14% on Wednesday, mirroring a significant retreat among Asian companies closely tied to the artificial intelligence sector. The sell-off followed a sharp downturn in U.S. technology stocks, prompting fresh concerns over lofty valuations in one of the most crowded areas of the global market.
The overnight declines in U.S. equities came as major banks cautioned that stock markets could face a correction, with worries mounting over excessive valuations. The U.S. stock markets edged down on Tuesday as the Dow Jones Industrial Average declined by 0.53% to 47,085.24. NASDAQ plummeted by 2.04% to 23,348.63, and S&P 500 lost 1.17% to 6,771.55. VIX surged by 10.66% to 19.00.
SoftBank, which has established a diverse range of AI-related investments encompassing infrastructure, semiconductors, and application firms, saw its market capitalization shrink by approximately $32 billion. LSEG data indicated that, should the losses continue, Wednesday would mark the company’s heaviest single-day decline since August last year, when shares slumped by more than 18%.
The conglomerate holds a controlling interest in UK-based Arm Holdings, whose semiconductor designs underpin major mobile and AI chips. SoftBank also enhanced its AI data-center capabilities this year with the acquisition of Ampere Computing. Arm Holdings, which is listed on the Nasdaq, saw its shares slide 4.71% in the previous U.S. trading session.
Beyond hardware, SoftBank has invested in prominent AI model developers such as OpenAI and supports various application-focused startups, including OpusClip—a generative AI-powered video editing tool—and Tempus AI, which harnesses machine learning for precision medicine.
SoftBank’s market capitalization has now contracted by close to $50 billion over the span of two days, after another 7% share price decline on Tuesday.
This steep drop coincided with a broader pullback in Japanese equities. The Nikkei 225 index shed 4% on Wednesday, putting it on course for its weakest session in seven months, as investors responded to the sharp losses on Wall Street. As of late morning, the Nikkei was trading at around 49,136, marking its lowest level since October 24 and slipping below the key 50,000-point threshold for the first time since late October. The index managed to surge above 50,000 marks in the afternoon session, but still 2.8% below yesterday’s closing.
