SoftBank shares slid nearly 10% after a $5.8 billion Nvidia stake sale, reigniting debate about overheating in the AI-driven stock rally.
SoftBank Group's shares plunged as much as 10% in volatile trading on Wednesday after the Japanese tech investment giant announced it had sold its entire $5.8 billion stake in U.S. chip titan Nvidia.
The sudden move to cash out of one of the AI revolution's biggest winners sent shockwaves through the market. This erased recent gains for SoftBank and sparked fresh concerns that the artificial intelligence-driven market rally has become a dangerously overinflated bubble.
Nvidia's own shares felt the chill, falling 3% in New York.
The massive stock sale is a bold, high-stakes maneuver by SoftBank founder Masayoshi Son to free up a significant war chest. This capital is reportedly earmarked for colossal new investments in AI, including the ambitious Stargate megaproject.
The decision to sell comes as a stunning pivot, as SoftBank had only reported its net profit had more than doubled in the last quarter, a colossal $16.2 billion gain driven largely by the soaring value of its AI-related holdings like Nvidia.
The sale of its Nvidia stake, a company whose processors are the backbone of the generative AI boom, is being interpreted by many investors as a sign that Son sees more value in funding his own AI ventures than riding the public market wave.
However, the timing of the exit from the high-flying chipmaker has amplified fears that the tech-rich Nasdaq, which has surged 25% since May, is overheated.
SoftBank's Chief Financial Officer, Yoshimitsu Goto, confirmed the sale was to "utilise the capital for our financing" but tellingly remarked, "I can't say if we're in an AI bubble or not."
For investors, that ambiguity did little to calm nerves, leaving the market to grapple with whether SoftBank just made a savvy pivot or signaled the top of the AI boom.
Riya turns everyday tech into effortless choices! With a knack for breaking down the trends and tips, she brings clarity and confidence to your downloading decisions. Her experience with ShopClues, Great Learning, and IndustryBuying adds depth to her product reviews, making them both trustworthy and refreshingly practical. From social media hacks and lifestyle upgrades to productivity boosts, digital marketing insights, AI trends, and more—Riya’s here to help you stay a step ahead. Always real, always relatable!
