Shares of SoftBank Group, the Japanese investment giant, plunged by 10% after a significant sell-off in the U.S. market, which triggered broader profit-taking across the technology sector. This downturn was not isolated to SoftBank, as other major Asian tech firms also experienced declines in their stock prices.
Despite recently surpassing Toyota Motor in market capitalization to become Japan’s most valuable company, SoftBank is facing heightened scrutiny over its aggressive investments in artificial intelligence (AI). Although the company’s shares have surged approximately 70% year-to-date, fueled by investor enthusiasm surrounding AI advancements, concerns linger regarding the sustainability of its high-risk strategies.
SoftBank’s CEO Masayoshi Son expressed confidence in the potential of AI, comparing its expected impact to that of the dot-com boom of the early 2000s. In a recent interview with CNBC, Son stated, “I expect the AI revolution to be 50 times larger than the dot-com revolution.” He cited historical trends, noting that major sectors have experienced downturns only to rebound strongly over long periods. “There may be some correction, but that will be the best investment opportunity to me,” he added.
Notably, Deutsche Bank analyst Peter Milliken highlighted a shift in market behavior, suggesting that investors have become overly focused on short-term momentum rather than the long-term outlook that includes detailed forecasting.
In South Korea, tech giants Samsung and SK Hynix also reported declines in their share prices, registering decreases of 1.25% and 2.75%, respectively. This drop follows a remarkable achievement earlier in the year when both companies surpassed a market valuation of $1 trillion in May.
In a strategic move, SoftBank recently offloaded a 3.25% stake in Indian eyewear maker Lenskart through its affiliate SVF II Lightbulb (Cayman). The sale involved approximately 56.5 million shares, priced at 508.55 Indian rupees ($5.32) each, amounting to a total transaction value of about 28.73 billion rupees. Key buyers in this transaction included mutual funds managed by ICICI Prudential, Indian financial services provider Kotak Mahindra, and the Los Angeles City Employees’ Retirement System pension fund.
As of the latest reports, SoftBank’s shares were trading 10.6% lower at 7,434 yen, reflecting a broader trend of profit-taking that has swept through the tech sector.
