SoftBank Group shares fell 6.9% on October 22, bringing the stock roughly 50% below its record high on June 2. Rising borrowing costs are prompting investors to reassess whether the Japanese technology investment group can sustain its large-scale bet on artificial intelligence, while its market value has contracted sharply from its peak.
SoftBank is now valued at about ¥24.7 trillion, or approximately $157 billion. Four months ago, its market capitalization briefly surpassed Toyota's, making it Japan's most valuable listed company. It has since fallen below Hitachi and Recruit Holdings, reshaping both its ranking and its position in the market.
Shares are down 50% from the June record
The latest decline comes as investors reassess valuations across AI-linked assets. SoftBank has drawn sustained attention for expanding its investment in the sector, but higher financing costs have increased questions over whether those commitments can generate commensurate returns.
Thursday's 6.9% drop took the cumulative decline from the June 2 record to 50%. The move puts the AI investment narrative that drove SoftBank's rapid market-value expansion in the first half of the year under closer scrutiny. A lower market capitalization could also reduce the company's room to support investments and financing with equity-linked assets, although the effect will depend on asset performance, financing arrangements and subsequent capital allocation.
Big Tech earnings have not eased the concerns
Results from major US technology companies have not eliminated the market's uncertainty. Their earnings remain an important support for the AI investment cycle, but investors are now focusing more closely on the relationship between heavy capital spending, financing costs and the cash returns those investments may deliver in the future.
That shift is particularly important for SoftBank. Its valuation is closely tied to the technology assets it holds and expectations for its AI investments. If markets assign lower valuations to AI-related assets or become more sensitive to borrowing costs, SoftBank can face pressure from both changes in portfolio valuations and tighter financing conditions.
SoftBank loses its brief lead over Toyota
SoftBank briefly overtook Toyota to become Japan's most valuable company. With the shares now down from their peak, its market capitalization stands at about ¥24.7 trillion, below the levels of Hitachi and Recruit Holdings. The change in rankings shows that markets are revising the value assigned to SoftBank's future investment returns and that the AI-themed trading momentum has become less supportive of the company's valuation.
As of October 22, two facts dominated the market's attention: SoftBank's shares had roughly halved from their June peak, and higher borrowing costs were prompting closer scrutiny of the returns on its AI capital spending. The company's valuation will continue to depend on the operating and market performance of its AI assets, as well as changes in financing costs.