SoftBank has jumped 146% since April, and that move has slammed it right up against Japan’s biggest bluechips in the Topix index. The stock now holds a 2% weight in the benchmark, putting it just behind Toyota and Sony.
The surge is being driven by billionaire founder Masayoshi Son, who’s been pouring billions into artificial intelligence, and it’s forcing even some of the firm’s harshest skeptics to get off the sidelines.
According to Bloomberg, fund managers tracking Japan’s equity market are being dragged into SoftBank whether they like it or not. Anyone trying to beat the index is now holding this stock or underperforming.
“A lot of institutional investors are now agonizing over how to deal with SoftBank,” said Yoshiki Nagata, chief investment officer at enTorch Capital Partners. “If you don’t own this particular stock, all the effort to pick other good investments goes to waste.”
Traders chase SoftBank after adding $110 billion in value
The numbers are loud. SoftBank has added 15.9 trillion yen — about $110 billion — to the Topix’s total value since March. That alone made up almost 10% of the index’s total market cap growth.
None of the other big names came close. The second and third biggest contributors, Advantest and Mitsubishi Heavy Industries, didn’t even make up half of that combined.
Nagata said that some investors now face structural pressure to buy more shares just to keep up with benchmark-linked portfolios. “When a share with a big weight like SoftBank keeps rising, it is hard to close your underweight position,” he said. “This is a structural problem with benchmark-linked investment. We could see a self-feeding loop of additional buying inviting more buying.”
The company’s connection to OpenAI is also dragging in more interest. Hiroaki Tomori, executive fund manager at Mitsubishi UFJ Asset Management, said people should be paying attention to how much OpenAI is spending and what that means for firms tied to it.
“OpenAI’s growth is staggering, the use of AI is becoming ubiquitous,” Hiroaki said. “We should see a sign of confidence behind the big orders OpenAI is making.” That momentum is lifting stocks like Broadcom and Oracle in the U.S., and now it’s spilling into Japan through SoftBank’s exposure.
High volatility adds risk but doesn’t stop inflows
Despite the rally, this stock isn’t for the faint of heart. SoftBank moves more than any of Japan’s 100 largest firms, with a beta of 1.515, meaning it swings about 1.5 times harder than the overall market. It tends to outperform during bull runs but takes heavier hits when markets fall.
Right now, the shares are trading at a 20% discount to net asset value, which is the tightest margin in years. That’s led to some speculation that the rally could pause if Son’s bets start to miss. But the spending is only getting bigger.
He’s already locked in a $30 billion commitment to the Stargate AI initiative with OpenAI, and recently surprised markets with a $2 billion position in Intel.
Analyst Daisaku Masuno at Nomura Securities doesn’t see the current rally slowing. He said improvements in the Vision Fund’s investments and new momentum in SoftBank’s AI chip plans are cutting down risks. Daisaku has already raised his price target on the stock twice in under a month and now thinks the discount to NAV could go to zero.
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