SoftBank shares slide over 8% amid renewed pressure on AI-linked stocks

Shares of Japan’s SoftBank Group resumed their slide on Friday, following a broader slump in AI-related stocks as investors once again grew wary of the sector’s lofty valuations.

The group, which holds a wide range of AI investments across infrastructure, semiconductor, and application companies, saw shares drop more than 8%.

This comes after SoftBank gained nearly 3% in the previous session, having plunged 10% on Wednesday to clock its worst day since April. It stares at about $53 billion market cap wipeout this week and its worst weekly loss since March 2020, if Friday’s losses hold.

“SoftBank Group’s shares are falling as many bought it as the only listed proxy for OpenAI,” said David Gibson, senior research analyst at financial services firm MST Financial.

The pullback reflects growing caution around the AI sector and a realization that many of OpenAI’s partnerships are still potential rather than confirmed, with funding prospects uncertain, he told CNBC.

OpenAI CEO Sam Altman reportedly said the company has spoken with the U.S. government about potential federal loan guarantees to encourage chip factory construction. His comments came after OpenAI’s CFO suggested the firm hoped for federal help in securing chip financing.

SoftBank holds a controlling stake in U.K.-based semiconductor designer Arm Holdings, whose chips help power mobile and AI processors globally. Shares of Nasdaq-listed Arm slid 1.21% overnight.

Separately, Bloomberg recently reported citing people familiar with the matter that the group considered acquiring U.S. chipmaker Marvell Technology Inc. earlier this year.

Other Japanese tech stocks also declined. Semiconductor testing equipment maker Advantest dropped over 6%, chipmaker Renesas Electronics fell nearly 4%, Tokyo Electron, a chip production equipment maker, declined 1.46%.

Shares of the world’s largest chipmaker, TSMC, fell 0.6%.

Nvidia-supplier SK Hynix was down over 1% and South Korean peer and memory chipmaker Samsung fell 0.5%.

The declines in Asian tech stocks also come after AI-related companies in the U.S. fell overnight

Qualcomm dropped almost 4%, despite strong quarterly results, after warning it could lose future Apple business. AMD, a strong performer Wednesday, slipped 7%, while Palantir and Oracle were down about 7% and 3%, respectively. Nvidia and Meta Platforms also finished lower.

The excitement surrounding AI has raised worries that markets might be experiencing a tech bubble. Some experts argue that the valuations of AI companies are starting to resemble the dot-com bubble of the late 1990s, with stock prices rising well beyond realistic profit forecasts.

The economic impact of artificial intelligence is undeniable and market bumps are inevitable, said Laura Cooper, global investment strategist at Nuveen.

“Still, it’s too soon to call a bubble. Today’s AI capex is being funded largely by cash-rich firms with solid balance sheets, not cheap credit or speculation,” she said. “The greater risk isn’t a bubble bursting, but valuation fatigue — investors tiring of paying ever-richer premiums for AI returns that don’t materialize quickly enough.”