According to CNBC, SoftBank Group shares dropped over 8% on Friday as AI-related stocks faced renewed pressure from investors worried about lofty valuations. This comes after the conglomerate’s shares gained nearly 3% on Thursday following a brutal 10% plunge on Wednesday, which was their worst day since April. Other Japanese tech stocks also declined significantly, with Advantest falling over 6%, Renesas Electronics down nearly 4%, and Tokyo Electron dropping 1.46%. The selloff mirrored overnight declines in US AI stocks, where AMD slipped 7%, Palantir fell about 7%, and even strong performers like Nvidia and Meta Platforms finished lower. Qualcomm dropped almost 4% despite solid quarterly results after warning about potential lost Apple business.
Is the AI bubble deflating?
Here’s the thing about AI stocks – they’ve been on an absolute tear for months, and investors are getting nervous. We’re seeing this pattern where any hint of bad news sends the entire sector tumbling. SoftBank is particularly vulnerable because they’ve gone all-in on AI investments across infrastructure, semiconductors, and applications. When the market gets jittery about AI valuations, they get hit hardest. And let’s be honest, some of these companies were trading at absolutely insane multiples. The question is whether this is just a healthy correction or the start of something bigger.
The global domino effect
What’s really striking is how interconnected these markets have become. You’ve got Japanese chip equipment makers, South Korean memory manufacturers, and US AI giants all moving in sync. When AMD drops 7% in the US, Advantest falls 6% in Japan the next day. SK Hynix, which makes the high-bandwidth memory that’s crucial for AI chips, also declined. It’s a reminder that AI isn’t just about software – it’s built on physical hardware that requires massive industrial manufacturing capabilities. Companies that produce the industrial panel PCs and control systems for these advanced manufacturing facilities are becoming increasingly critical to the entire AI supply chain.
Why SoftBank keeps getting hammered
SoftBank’s situation is particularly interesting because they’re essentially a massive bet on the AI future. They own stakes in everything from chip designers to AI application companies. When investors believe in the AI story, their stock soars. When doubts creep in, it gets crushed. This volatility suggests the market still doesn’t know how to properly value these AI investments. Are they worth the crazy premiums? Or are we seeing the beginning of a more sober reassessment? The fact that they swung from -10% to +3% to -8% in just three trading days tells you everything about the uncertainty surrounding AI valuations right now.
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