SoftBank overtakes Toyota as Japan's most valuable company on AI boom

Tokyo: SoftBank Group Corp. on Monday overtook Toyota Motor Corp. to become Japan's most valuable company, underscoring investor enthusiasm for artificial intelligence and reshaping the country's corporate hierarchy.

Shares of the Masayoshi Son-led technology conglomerate surged 14% in Tokyo trading, lifting its market capitalisation above Toyota's for the first time in more than two decades. SoftBank's market value crossed ¥48 trillion, compared with Toyota's roughly ¥46 trillion. The last time SoftBank briefly surpassed Toyota was during Japan's dotcom boom in 2000.

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The rally has pushed SoftBank shares up more than 90% this year, while Toyota's stock has declined over 10%.

The shift highlights how investors are increasingly favouring companies tied to the AI boom, even as automakers face slowing demand, higher costs and a challenging transition to electric vehicles.

"This epoch-making event symbolises the AI boom," said Kazuhiro Sasaki, head of research at Phillip Securities Japan. He said expectations of major US technology listings are driving a broader reallocation of capital toward AI-related firms.

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Japan's memory-chip maker Kioxia Holdings has also benefited from the AI wave, with a market capitalisation nearing ¥40 trillion, making it the country's third-most valuable company. Demand from AI data centres has boosted prospects for the NAND flash chip producer.