AI Boom Drives Market Cap Surge: SoftBank Overtakes Toyota as Japan's Top Company

TOKYO (CNA) - Fueled by the artificial intelligence (AI) boom, Japanese tech giant SoftBank Group surpassed Toyota Motor today to become the company with the highest market capitalization in Japan, ending Toyota's more than 20-year reign at the top. According to the Financial Times, the Japanese stock market continues to hit new highs, spurred by the strong rally in AI-related stocks. The Nikkei 225 index, which has a high weighting of tech stocks, rose more than 1.2% in the first hour of trading today, breaking through the 67,000-point mark for the first time, with a cumulative gain of nearly 30% year-to-date. SoftBank's stock has surged nearly 73% this year and hit a new high today, rising more than 8% during the session. The company previously announced plans to invest up to 75 billion euros in France to build AI computing clusters. Its market capitalization has now exceeded 46 trillion yen. Toyota's market cap was slightly above 48 trillion yen at the close on May 29, but it plunged nearly 4.5% today, falling below 46 trillion yen. Toyota had replaced NTT Docomo as the largest company by market cap in 2003. SoftBank has become the primary engine of the current AI boom in the Japanese market due to its heavy investment in ChatGPT developer OpenAI and its aggressive positioning in the AI industry. Furthermore, due to market expectations of a surge in demand for memory chips required for data center construction, shares of memory chip maker Kioxia have soared more than 525% this year, becoming the third-largest listed company in Japan by market cap, surpassing Mitsubishi UFJ Financial Group (MUFG). Analysts point out that the recent surge in the stock prices of SoftBank and other AI-related companies also reflects the re-entry of foreign capital into the Tokyo stock market. Neil Newman, chief strategist at Tokyo-based investment advisory firm Astris Advisory, said, 'We have long predicted that when large US funds truly start investing in the Japanese market, there will soon be a shortage of large targets to invest in, so tech giants including SoftBank are about to see a wave of surges.'