SoftBank sinks 8% as Japanese chip stocks track Wall Street AI sell-off

July 17, 2026 - 09:55

Japanese technology and semiconductor stocks plunged on Tuesday, tracking a sharp sell-off on Wall Street that hit artificial intelligence-related shares. SoftBank Group, a major investor in tech startups and AI, saw its stock drop 8 percent in Tokyo trading. The broader sell-off was driven by disappointment over Taiwan Semiconductor Manufacturing Company's latest outlook, which failed to calm investor fears about slowing demand for AI chips.

The slump spread across Asia, with Japan's chip-equipment makers and AI-linked firms suffering the heaviest losses. Investors had been looking to TSMC's earnings for reassurance that the AI boom remains strong, but the company's cautious forward guidance instead sparked a wave of selling. The rout in U.S. semiconductor shares overnight set the tone for Asian markets, as traders reassess the high valuations of AI stocks amid rising uncertainty about future growth.

Analysts noted that the market is becoming more sensitive to any signs of a slowdown in AI spending, especially after months of exuberance. SoftBank's decline also reflected its heavy exposure to unlisted tech startups and its large stake in Arm Holdings, which has been volatile. The Nikkei index fell more than 2 percent, dragged down by chip-related names. The sell-off highlights growing caution about whether the AI rally can sustain its momentum in the face of rising interest rates and geopolitical risks.