SoftBank surpasses Toyota to become Japan's most valuable company, ending a 20-year reign.

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SoftBank Group has surpassed Toyota Motor thanks to the artificial intelligence boom, ending the automaker's more than 20-year reign as Japan’s most valuable company and marking how global capital’s pursuit of AI and semiconductors is profoundly reshaping the landscape of the Japanese stock market.

On Monday, SoftBank’s share price surged more than 13% intraday to another record high, with its market capitalization topping 46 trillion yen (about $288 billion). At the same time, Toyota’s share price dropped nearly 4.5%, its market value fell below 46 trillion yen, relinquishing its position as Japan’s largest listed company.

This historic leadership change comes amid overall strength in Japan’s stock market. The tech-heavy Nikkei 225 Index rose more than 1.2% in the first hour of trading on Monday, breaking above 67,000 points for the first time, with gains nearing 30% so far this year.

AI Bets Drive SoftBank’s Share Price Surge

SoftBank’s cumulative gains this year have approached 73%, making it one of the most aggressively rising large-cap stocks in Japan. The core logic driving this rally lies in the market’s continual repricing of SoftBank’s AI strategy.

SoftBank holds significant exposure to OpenAI, the developer of ChatGPT, and has broader strategic ambitions in the AI sector. On Monday, SoftBank announced it will invest up to €75 billion in France to build a large-scale AI computing cluster network, further boosting market confidence in its AI positioning.

Previously, SoftBank’s stock price hit a peak last October before sharply retreating, as investor sentiment turned cautious due to uncertainties about OpenAI’s outlook. Subsequently, as OpenAI’s plan to list in the US began to take shape, and with SoftBank’s core asset, chip designer Arm, forecasting growth in self-developed semiconductor revenues, market sentiment reversed once again.

Toyota Loses Its Crown, Japan’s Market Value Landscape Reshaped

Toyota overtook telecom operator NTT Docomo in 2003 to become Japan’s most valuable company and stayed at the top for over 20 years. Being supplanted by SoftBank this time reflects a structural shift in global investor preferences—from traditional manufacturing and industrial giants to assets related to AI and semiconductors.

A stock analyst at Nomura Securities said last week they expect the Nikkei 225 Index to hit 68,000 points by the end of 2026, and possibly reach 70,000 points next year, with some of the momentum coming from higher earnings forecasts for AI and chip companies. However, Nomura’s chief stock strategist Tomochika Kitaoka also cautioned: "In the short term, we think now is the time to assess whether improvements in earnings forecasts for AI and semiconductors can be sustained."

Semiconductor manufacturer Kioxia’s share price has risen more than 525% this year, with market expectations that its memory chips will benefit from explosive demand for data center construction; it now ranks as Japan’s third most valuable listed company, surpassing Mitsubishi UFJ Financial Group (MUFG), the country’s largest bank.

Foreign Capital Continues to Flow in, Japan’s Large-Cap Tech Stocks Favored

Analysts note that SoftBank and other Japanese AI-related companies’ strong performance has also benefited from renewed interest among foreign investors in Tokyo’s stock market. For the week ending May 23, overseas investors made net purchases of Japanese stocks totaling 1.1 trillion yen, marking the eighth consecutive week of net buying.

Neil Newman, chief strategist at Tokyo’s Astris Advisory, said: "We’ve long said that when large US funds truly start entering the Japanese market, there will quickly be a shortage of investable large-cap companies, and large tech stocks like SoftBank will benefit greatly."

Jesper Koll, director at brokerage Monex Group, attributed this trend to deeper market logic: "Japanese companies cannot escape the spirit of the times—charismatic leadership and bold risk-taking are defeating adherence to incremental improvements and a robust balance sheet."

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