SoftBank Shares Plunge Over 9% as Asian Tech Stocks Track Declines in U.S. Peers

Shares of SoftBank Group plunged as much as 9.2% Wednesday, leading losses across major technology firms in Asia, as technology stocks across the region declined sharply, tracking losses in U.S. peers overnight. The tech-focused investment firm saw shares drop for a second consecutive session, following its announcement of a $2 billion investment in Intel, which ironically drove Intel shares up 6.97% to close at $25.31 Tuesday stateside.

The decline marks a dramatic reversal for SoftBank, which had been riding high on artificial intelligence investments. SoftBank shares surged to a record after it swung to a quarterly profit, an affirmation for Masayoshi Son’s bets on artificial intelligence players such as Nvidia Corp just weeks ago. However, the current selloff demonstrates how quickly market sentiment can shift in the volatile AI sector.

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Japan’s Semiconductor Complex Hit Hard

Japan’s semiconductor ecosystem bore the brunt of the selling pressure. Semiconductor giant Advantest falling as much as 6.27%. Meanwhile, shares in Renesas Electronics and Tokyo Electron were last seen trading 2.46% and 0.75% lower, respectively. These companies form the backbone of Japan’s semiconductor supply chain, making their synchronized decline particularly concerning for the broader tech sector.

The Japanese semiconductor industry has been experiencing a renaissance, driven by government initiatives to strengthen domestic chip production and reduce reliance on foreign suppliers. Companies like Tokyo Electron, which produces critical semiconductor manufacturing equipment, and Renesas Electronics, a major automotive chip supplier, have been beneficiaries of this trend. However, their vulnerability to global tech sentiment remains evident.

Regional Ripple Effects Across Asia

The selloff extended well beyond Japan’s borders, creating a domino effect across Asia’s major technology hubs. Shares of Taiwanese chip companies TSMC and Hon Hai Precision Industry — known globally as Foxconn — declined 1.69% and 2.16%, respectively. These declines are particularly significant given these companies’ critical roles in the global AI supply chain.

TSMC, the world’s largest contract chipmaker, manufactures Nvidia’s high-performance graphics processing units that help power large language models, making it essential to the AI boom. Meanwhile, Foxconn has a strategic partnership with Nvidia to build “AI factories.” The decline in these stocks suggests investors are reassessing the sustainability of AI-driven valuations.

In South Korea, the semiconductor sector also felt the pressure. South Korean tech stocks mostly fell with shares of chipmaker SK Hynix down 3.33%. Samsung Electronics, however, rose 0.75%. The divergence between SK Hynix and Samsung reflects different market perceptions of their AI exposure and competitive positions.

Hong Kong Tech Giants Join the Decline

Hong Kong’s technology sector wasn’t spared from the global tech rout. Over in Hong Kong, the Hang Seng Tech index lost 0.87% in early trade, with several major names experiencing significant declines.

The worst performing stocks on the index were Kuaishou Technology, which declined 4.8%, JD Health International, down 3.31% and Horizon Robotics, which lost 2.29%. These companies represent different aspects of China’s tech ecosystem, from social media and e-commerce to emerging robotics and AI applications.

Even China’s tech giants weren’t immune. Losses were also seen in tech majors Alibaba Group and Xiaomi Corp, down 1.44% and 1.34%, respectively. Alibaba’s decline is particularly noteworthy given SoftBank’s historical connection to the e-commerce giant, which was one of Masayoshi Son’s most successful investments.

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The CHIPS Act Equity Stake Controversy

Adding to market uncertainty, U.S. Commerce Secretary Howard Lutnick is considering the federal government taking equity stakes in semiconductor companies that get funding under the CHIPS Act for building plants in the U.S. This development has created additional regulatory overhang for the semiconductor sector.

The CHIPS and Science Act, passed during the Biden administration, set aside $39 billion in loans and tax benefits for the Commerce Department to distribute. However, the Trump administration’s approach represents a fundamental shift in how the U.S. government engages with private industry.

Lutnick told CNBC that the U.S. government must receive an equity stake in Intel in exchange for CHIPS Act funds. The potential deal would convert the grants into equity and wouldn’t come with governance rights in Intel, Lutnick said. This policy could set a precedent for other major CHIPS Act recipients.

Apart from Intel, Commerce Secretary Howard Lutnick is also exploring deals with Micron, Taiwan Semiconductor Manufacturing Co (TSMC), and Samsung that would see Washington secure ownership interests in return for billions in grants. The U.S. Commerce Department late last year finalized subsidies of $4.75 billion for Samsung, $6.2 billion for Micron and $6.6 billion for TSMC to produce semiconductors in the U.S.

SoftBank’s Strategic Pivot and Vision Fund Performance

SoftBank’s current market struggles occur against the backdrop of CEO Masayoshi Son’s ambitious pivot toward artificial intelligence. Masayoshi Son is making his biggest bet yet: that his brainchild SoftBank will be the center of a revolution driven by artificial intelligence. The 67-year-old billionaire says artificial superintelligence (ASI) — AI that is 10,000 times smarter than humans — will be here in 10 years.

This strategy marks a significant evolution from SoftBank’s previous approach. SoftBank Group Corp.’s flagship Vision Fund has quietly sold off or written down billions of dollars’ worth of its publicly-listed holdings in recent years, a sign of founder Masayoshi Son’s shift away from the venture capital deals that were once an obsession and toward strategic investments in semiconductors and artificial intelligence.

Since the end of 2021, the world’s biggest startup fund has seen its U.S.-listed portfolio shrink by almost $29 billion, as it sold down stakes in companies such as Coupang Inc., DoorDash Inc. and Grab Holdings Ltd. and share prices fell.

The Vision Fund, once the toast of Silicon Valley, has had a tumultuous journey. SoftBank said the value of its Vision Funds rose $4.8 billion. It is the biggest gain in value for the Vision Fund since the June quarter of 2021 in its most recent quarter, showing signs of recovery after years of struggles.

The Nvidia Connection and Market Dynamics

The current selloff was triggered by declines in U.S. technology stocks, particularly Nvidia, which has become synonymous with the AI revolution. SoftBank’s relationship with Nvidia has been complex and costly. In 2019, SoftBank’s Vision Fund decided to sell all of its Nvidia shares, which comprised 4.9% of the company. Although back then this seemed like a smart move because SoftBank had originally spent around $700 million to buy the shares and ended up making a huge profit of $3.3 billion from the sale, now it’s clear: had Softbank held onto those shares, they would be worth more than $150 billion.

Learning from this costly mistake, SoftBank Group Corp. is building up stakes in Nvidia Corp. and Taiwan Semiconductor Manufacturing Co., the latest reflection of Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence. The Japanese technology investor raised its stake in Nvidia to about $3 billion by the end of March, up from $1 billion in the prior quarter.

Intel Partnership and Strategic Implications

SoftBank’s $2 billion investment in Intel represents a significant strategic bet on the struggling chipmaker’s turnaround efforts. Intel shares rose 6.97% to close at $25.31 Tuesday stateside following the announcement, even as SoftBank’s own shares declined.

The deal positions SoftBank as Intel’s fifth-largest shareholder with approximately 2% ownership, providing crucial capital as Intel works to regain competitiveness in the AI chip market. This investment comes at a critical time for Intel, which has been struggling to capitalize on the AI boom while competitors like Nvidia have surged ahead.

The investment represents a significant vote of confidence from SoftBank CEO Masayoshi Son, who cited Intel’s “essential role” in U.S. semiconductor production. However, Intel faces significant challenges, including its foundry division posting an $18.8 billion loss in 2024 despite receiving $8.5 billion in U.S. subsidies.

The Broader AI Investment Landscape

SoftBank’s struggles reflect broader questions about AI valuations and the sustainability of the current investment boom. In December 2024, it was reported by CNBC that Softbank plans to invest $100 billion in the US over the next 4 years, with funding coming from various sources controlled by Softbank, including the Vision Fund, capital projects or chipmaker Arm Holdings.

The company is also involved in several major AI initiatives. In January 2025, SoftBank Group, Oracle Corporation, MGX, OpenAI, and other partners established The Stargate Project as a cooperative venture aimed at building AI infrastructure in the US. With an estimated $500 billion in investment, the program seeks to generate 100,000 new jobs in the US by 2029.

However, questions remain about funding and execution. Bloomberg reported that dozens of financial players are reassessing investment in data centers due to growing economic volatility, and SoftBank has yet to come up with a financing template for Stargate.

Market Outlook and Industry Implications

The current tech selloff highlights the interconnected nature of global technology markets and the outsized influence of AI-related sentiment on market valuations. As regulatory uncertainty increases with the Trump administration’s new approach to semiconductor subsidies, and as questions mount about AI valuations, investors are reassessing their positions across the tech sector.

For SoftBank specifically, the challenge will be executing on Masayoshi Son’s ambitious AI vision while managing the volatility inherent in technology investments. The company’s pivot from broad venture capital investments to focused AI and semiconductor plays represents a significant strategic shift that will likely define its future performance.

The semiconductor industry, meanwhile, faces a complex landscape of geopolitical tensions, supply chain challenges, and evolving government policies. The success of initiatives like the CHIPS Act and the Trump administration’s equity stake approach will have far-reaching implications for global semiconductor competitiveness and investment flows.

As markets continue to digest these developments, the tech sector’s resilience and adaptability will be tested once again, with companies like SoftBank serving as bellwethers for broader industry trends and investor sentiment in the rapidly evolving AI landscape.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

20th August, 2025