Japan’s Softbank tumbled 14% on Wednesday, November 5, 2025, continuing a two-day sell-off that wiped out $50 billion in market cap. This comes amid a global sell-off in technology and semiconductor stocks due to concerns that valuations have become too stretched in the artificial intelligence (AI) sector.
SoftBank’s stock dropped over 14% on the Tokyo Stock Exchange, following a 7% decline on Tuesday, marking one of its steepest two-day falls in recent years. The sell-off mirrors a global tech retreat that began on Wall Street, where AI-linked companies faced intense selling pressure.
Despite the recent slump, SoftBank still ranks among the best-performing stocks of 2025. Shares of the company have rallied 206% in six months and 154% YoY, showing the market's excitement for its AI-driven strategy and holdings.
The decline in SoftBank coincides with a broader correction in AI-related stocks around the world. Investors are hesitant because the valuations of AI companies have increased too quickly, as many are now trading at their historical peak price-to-sales multiples.
The decline in AI-related stocks began overnight in the US when Palantir Technologies, one of the most expensive AI stocks on S&P 500, dropped over 8% even after reporting better-than-expected earnings.
More tech titans followed Palantir's lead, as NVIDIA slipped 4% and AMD dropped 5%.
The sell-off quickly spread to Asia, dragging down key semiconductor and AI-linked firms. In Japan, Advantest, a leading maker of semiconductor testing equipment, fell by over 8%, while Renesas Electronics dropped 6%.
Samsung Electronics and SK Hynix in South Korea declined 6% each, though both remain significantly higher year-to-date, up 80% and 210% respectively.
In Taiwan, TSMC shares slipped over 3%, while Chinese tech giants Alibaba and Tencent lost 3% and 2%, respectively.
SoftBank’s massive exposure to AI investments has amplified its volatility. The group holds a controlling stake in Arm Holdings, whose chip designs power much of the mobile and AI computing world. Arm’s US-listed shares fell 4.7% overnight, adding further pressure to SoftBank’s valuation.
The company’s recent acquisition of Ampere Computing, aimed at strengthening its AI data center capabilities, underscores its commitment to the sector.
Also Read: US Stock Market Today: Tech Stocks Take a Hit, S&P 500 and Nasdaq Plunge Amid Valuation Concerns
While analysts still have longer-term confidence in SoftBank's positioning in AI, the recent correction served as a strong reminder of the risks of concentrated exposure to a sector moving in both euphoria and corrections.
The market focus will likely revolve around US economic data and interest rate indicators, which may clarify whether this AI sell-off will accelerate or stabilize.