SoftBank Group’s market value has dropped 50% from its June peak, reflecting investor concern over its debt-heavy AI investment strategy and rising credit costs. The firm is currently the worst performer on the Nikkei index this month. Shareholders are now monitoring how the company handles its high leverage as competition for its key portfolio holdings intensifies.
SoftBank Group, once Japan's largest company by market capitalization, has seen its value decline by 50% from its June 2 peak. As of October 2026, the company’s market capitalization stands at approximately ¥24.7 trillion, or roughly $157 billion. This sharp decline, which included a 6.9% drop in its stock price on Thursday, indicates a period of intense pressure for the Tokyo-based conglomerate as investors re-evaluate its business strategy.
At the heart of the investor concern is SoftBank's heavily leveraged structure. The financial strain is becoming increasingly visible in credit markets, where the cost to insure the company’s debt against default, measured by credit-default swaps, hit four-year highs this week. This signals that bondholders are increasingly worried about the firm’s ability to manage its obligations, especially as global borrowing costs remain high. The company’s decision to pursue an aggressive $11.1 billion junk bond sale in September, while aimed at funding future growth, has not calmed concerns over the debt required to fuel such an expansive strategy.
Founder Masayoshi Son has made AI infrastructure, robotics, and energy the center of SoftBank’s future growth. This includes significant bets under the Vision Fund, which has historically relied on high valuations to generate returns. However, the external environment has become more difficult. As interest rates remain elevated, the cost of servicing debt increases, which can pressure cash flow and financial flexibility. Furthermore, if the enthusiasm for AI-related assets continues to cool, the resulting valuation hits to the company’s private portfolio could make future capital raises more expensive.
Competition is also complicating the outlook for key portfolio companies. For example, OpenAI, which has received approximately $65 billion in funding linked to SoftBank, is now facing increased pressure from Chinese rivals that offer similar technology at a more competitive cost. These competitive headwinds, combined with recent distress signals from cloud-computing provider CoreWeave—another key name in the SoftBank ecosystem—have exacerbated worries about the systemic risks inherent in the firm's AI-focused portfolio.
SoftBank has now fallen behind other Japanese giants like Hitachi and Recruit Holdings in market value. Being the worst-performing stock on the Nikkei index so far this month reflects the market's reduced confidence in the company’s ability to justify its aggressive expansion in a tighter credit environment. Looking ahead, investors will likely track the company's ability to maintain liquidity, the performance of its major portfolio companies, and whether management can reduce reliance on debt if the current investment climate remains challenging.