SoftBank seizes Japan’s valuation crown from Toyota

SoftBank Group has overtaken Toyota Motor as Japan’s most valuable company, underlining a sharp shift in investor preference from the country’s traditional manufacturing champions towards businesses seen as central to the global artificial intelligence build-out.

Shares in Masayoshi Son’s technology investment group surged in Tokyo trading, lifting its market value to about ¥47.2 trillion, or roughly $296 billion, ahead of Toyota’s ¥45.7 trillion after the carmaker’s stock fell nearly 5 per cent. The move placed SoftBank at the top of Japan’s corporate valuation table for the first time in more than two decades and added momentum to a Nikkei 225 rally that pushed the index above 67,000.

The change is more than a stock-market milestone. It reflects how the AI boom has reshaped capital allocation in Japan, where investors are assigning higher value to companies with exposure to semiconductors, data centres, power infrastructure and generative AI platforms. Toyota remains one of the world’s largest and most profitable carmakers, but its valuation is now being weighed against a slower earnings outlook, tariff pressure, currency swings and the heavy cost of electrification.

SoftBank’s advance has been driven by a powerful combination of portfolio gains and expectations that its AI-linked holdings could generate fresh liquidity. The group’s exposure to Arm, the British chip-design company it took public in 2023, has become a key pillar of its market value. Arm’s technology is used widely across smartphones, cloud computing and increasingly AI-related chips, giving SoftBank a central position in the semiconductor supply chain.

OpenAI has become the second major driver of investor attention. SoftBank has committed tens of billions of dollars to the ChatGPT developer and is positioning itself as a core financier of AI infrastructure. Expectations that OpenAI could move towards a public listing have intensified interest in SoftBank’s asset base, even as analysts continue to debate how much of the group’s valuation depends on private-market pricing and future monetisation.

The latest surge followed SoftBank’s plan to invest up to €75 billion in AI infrastructure in France, including data centres and power-intensive computing capacity. The first phase is expected to involve about €45 billion of investment to build 3.1 gigawatts of capacity by 2031, with further expansion potentially taking the total to 5 gigawatts. The project places France at the centre of Europe’s push to develop sovereign AI infrastructure, helped by its nuclear-heavy power system and available industrial sites.

SoftBank is also moving to create public-market vehicles around AI infrastructure. SB Energy, its power and data-centre platform, is preparing for a potential US listing and has been linked to a valuation above $50 billion. The company is involved in large-scale power projects designed to support AI workloads, including a 1.2-gigawatt data-centre development in Texas. A separate robotics venture, Roze, is also being prepared for a possible listing, highlighting SoftBank’s attempt to build an ecosystem around energy, construction automation and computing capacity.

Toyota’s fall in ranking does not signal operational weakness. The carmaker reported operating income of ¥3.8 trillion for the financial year ended March 2026, supported by vehicle sales and pricing power despite tariff costs and rising expenses. It remains a global force in hybrid technology, production efficiency and supply-chain management. However, investors have become more cautious about its growth outlook as the auto sector faces higher regulatory costs, slower battery-electric vehicle adoption in some markets, and intensifying competition from China-based manufacturers.

The contrast between SoftBank and Toyota captures a broader reordering of Japan’s equity market. AI-linked names, chip suppliers and infrastructure companies are drawing strong inflows, while parts of the auto sector and older industrial groups face questions over margin durability. Kioxia, the memory-chip maker, has also climbed sharply this year, showing how investor enthusiasm has spread beyond SoftBank into companies tied to storage and high-performance computing.

The rally has strengthened the profile of Son, whose investment record has swung between spectacular gains and painful losses. SoftBank’s Vision Fund suffered heavy write-downs after the collapse in technology valuations in 2021 and 2022, while earlier bets such as WeWork damaged confidence in the group’s risk controls. Its comeback has been powered by a more concentrated AI narrative, but that also leaves the shares vulnerable if expectations around OpenAI, Arm or infrastructure listings are revised lower.