SoftBank overtakes Toyota as Japan's most valuable company at $301B

SoftBank Group surpassed Toyota Motor to become Japan's most valuable publicly traded company for the first time in more than two decades, as an AI-driven rally pushed the Nikkei 225 above 67,000 for the first time.

SoftBank Group shares surged 14% to 8,541 yen on Monday, lifting its market capitalization past 48 trillion yen ($301 billion) and overtaking Toyota Motor for the top spot among Japanese companies.

"In competitions of technologies, rival companies will instantly pass you if you let your guard down," Masayoshi Son, chairman and CEO of SoftBank Group, told reporters in Paris. The 68-year-old mogul has become Asia's richest person with a net worth of $97 billion, according to Forbes estimates.

Toyota Motor shares fell 4.5% to 2,905.5 yen, shrinking its market cap to just under 46 trillion yen and ending a 22-year reign as Japan's most valuable company since it overtook NTT Docomo in December 2003. The Nikkei 225 climbed 1.1% to close at 67,038.24 after touching a record high of 67,231.28, while the broader Topix sagged 0.2%, highlighting the divergence between tech and the rest of the market.

The milestone marks a shift in Japan's industrial landscape as AI-related investments reshape the country's corporate hierarchy. SoftBank has pledged 75 billion euros ($87.3 billion) over five years to build AI data centers in France, and Son has set a goal for the company to become the world's leading platform for artificial superintelligence.

The rally in SoftBank shares has been fueled by multiple catalysts. The company's net profit for fiscal 2025 surged more than fourfold to 5 trillion yen, a record for any Japanese company. Its near-90% stake in chip designer Arm Holdings has proved transformative — Arm shares have rallied more than 250% this year after forecasting it may achieve its $15 billion chip sales target ahead of schedule.

OpenAI, the ChatGPT creator in which SoftBank has invested over $30 billion, was valued at $852 billion in March after raising $122 billion from investors including Amazon and Nvidia. Reports that OpenAI is preparing to file for an initial public offering have further boosted SoftBank shares. Son told CNBC the AI revolution was "more than 10x, probably 50x bigger than dotcom."

Sector rotation tells the story

The split between tech and traditional industries was stark. IT firms on the Tokyo Stock Exchange jumped 4.3%, while auto shares tumbled 4.2%. Electronic component maker Murata Manufacturing surged 14.1% to lead the Nikkei's percentage gainers, as investors rotated into AI-exposed names. Kioxia Holdings ranked third by market capitalization at around 39 trillion yen after its shares surged in recent weeks.

Breadth data showed the narrowness of the rally: only 73 of the Nikkei's 225 components rose, versus 152 that fell. The yen traded at 159.47 against the dollar, providing a tailwind for Japan's export-oriented tech sector.

Deutsche Bank analyst Peter Milliken cautioned in a research note that "it won't entirely be smooth sailing," pointing to competition OpenAI faces from Anthropic, which reached a valuation of $965 billion after a May funding round. Cheaper open-source AI models are also gaining popularity globally, potentially pressuring OpenAI's sales growth.

"Analysts and investors appear to us to have become fixated on short-term momentum, and less interested, or unable, to map out the long-term trajectory with detailed assumptions," Milliken wrote.

This article is for informational purposes only and does not constitute investment advice.