Japan’s stock market has reached a historic milestone, with the Nikkei 225 surpassing 68,000 for the first time, driven by an ongoing global buying craze fueled by artificial intelligence (AI). On Wednesday, the benchmark index surged nearly 3%, contributing to an impressive rise of approximately 33% year-to-date.
The rapid ascent of the Nikkei 225 reflects a broader optimism surrounding the AI sector, which has invigorated equity markets across Asia. Khoon Goh, head of Asia research at ANZ, commented on the phenomenon, noting that investor excitement about the AI boom is significantly boosting regional markets. The rising demand for high-performance semiconductors—critical components for AI technologies—has particularly benefitted Japanese firms, amplifying their stock performance.
Leading the charge in Japan’s semiconductor sector, Tokyo Electron, the country’s largest semiconductor equipment manufacturer, saw its shares climb as much as 14% during morning trading. Other key players in the industry also demonstrated robust gains: Advantest, a supplier of testing equipment, increased by over 5.5%, while Shin-Etsu Chemical, known for its silicon wafers, rose around 4%. In contrast, tech giant SoftBank experienced a decline of approximately 3%, despite recently surpassing Toyota to become Japan’s most valuable company by market capitalization.
The AI chip frenzy has not only impacted Japanese stocks but has also influenced global markets. Major U.S. indexes, along with those in South Korea and Taiwan, are hitting record levels due to the substantial demand for AI technologies. Over the past month alone, three memory chip manufacturers—SK Hynix, Samsung Electronics, and U.S.-based Micron—have joined the exclusive club of companies with a market capitalization exceeding $1 trillion. This milestone remains rare, with only 17 firms reaching it, the vast majority being American.
Despite some investors expressing concerns regarding the potential unsustainability of these inflated valuations in the tech sector, the trend shows no signs of abating. Tech companies are committing significant investments to AI infrastructure, with projections from Goldman Sachs indicating that U.S. tech giants are expected to spend upwards of $800 billion on AI-related capital investments in 2026. This week, Google’s parent company, Alphabet, emerged as the latest tech leader to announce ambitious AI investment plans, revealing intentions to sell $80 billion in shares to support expected capital expenditures of $180 to $190 billion for the year.
Overall, the dynamics of AI-driven market activity continue to shape the investment landscape, with widespread implications for economies worldwide.
