Japan’s stock market entered a new phase of the artificial intelligence boom on Monday as the benchmark Nikkei 225 breached the 67,000 mark for the first time in history, driven overwhelmingly by AI-linked companies and a dramatic surge in shares of SoftBank Group, which overtook Toyota Motor as the country’s most valuable listed company.
The milestone underscores how investor enthusiasm is increasingly shifting away from Japan’s traditional industrial champions toward companies positioned at the center of the global AI infrastructure race.
The Nikkei climbed as much as 1.4% to a record 67,231.28 before ending the session at 66,934.33, up 0.9%. Yet the headline gain masked a highly concentrated rally. SoftBank alone accounted for more than the entire net increase in the index, highlighting how a handful of AI beneficiaries are now exerting outsized influence over Japanese equities.
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Shares of the technology investment giant jumped 14%, adding roughly 845 points to the Nikkei. By contrast, the index itself rose 605 points, meaning the broader market was considerably weaker than the benchmark’s headline performance suggested.
The rally propelled SoftBank’s market capitalization to approximately ¥48.8 trillion ($306 billion), surpassing Toyota’s ¥45.9 trillion after the automaker’s shares fell 4.5%.
The changing rankings carry symbolic importance. For decades, Toyota represented the pinnacle of Japan’s corporate sector, embodying the country’s manufacturing strength and export prowess. SoftBank’s ascent signals that investors believe the next era of value creation will come from AI infrastructure, computing power, and digital platforms rather than automobiles and traditional industrial production.
At the center of investor enthusiasm is SoftBank founder Masayoshi Son’s aggressive push into artificial intelligence. Over the weekend, the company unveiled plans to invest about €75 billion ($87 billion) over five years to help build AI infrastructure in France, one of the largest technology investment commitments ever announced in Europe.
The French initiative forms part of a broader strategy that is transforming SoftBank into one of the world’s largest AI infrastructure investors. The company has already committed tens of billions of dollars to OpenAI, benefits from its controlling stake in Arm Holdings, and continues to expand investments spanning data centers, chips, cloud infrastructure, and next-generation computing.
For investors, SoftBank represents a leveraged bet on global AI adoption.
The company’s valuation has been boosted not only by the soaring worth of Arm and OpenAI but also by expectations that demand for AI computing capacity will remain robust for years as governments and corporations race to build data centers capable of training and deploying advanced AI models.
The strength of that narrative was evident across Japanese technology stocks. Electronic components manufacturer Murata Manufacturing surged 9%, benefiting from expectations that AI server demand will create new opportunities across semiconductor supply chains and advanced electronics manufacturing.
Analysts say the market is broadening beyond obvious AI winners such as chipmakers and cloud providers, with investors increasingly identifying secondary beneficiaries throughout the technology ecosystem.
“Despite concentration risks and rising volatility, the AI theme continues to be underpinned by strong earnings,” strategists at Jefferies wrote in a research note.
“This rally is fundamentally driven, and the message is clear: follow the earnings momentum.”
That earnings story has become important as investors attempt to distinguish the current AI boom from previous technology bubbles. Unlike the dot-com era, many of today’s leading AI companies are generating substantial revenue growth and attracting significant capital commitments from enterprise customers.
Still, Monday’s market action also revealed growing divisions beneath the surface. The broader Topix index fell 0.4%, illustrating that much of the market remains disconnected from the AI rally. Among the Tokyo Stock Exchange’s 33 industry groups, only seven advanced, while most sectors declined.
The divergence was especially apparent in the automotive sector. Auto shares dropped 3.8%, making them among the weakest performers of the day. The decline reflects concerns that rising geopolitical uncertainty, trade tensions, and slowing global growth could weigh on traditional manufacturing businesses even as technology firms benefit from AI-related spending.
Market breadth was similarly narrow. Only 70 of the Nikkei’s 225 constituent companies gained ground, while 155 declined.
That imbalance indicates that investors are becoming increasingly selective, concentrating capital into a relatively small group of AI-linked companies while reducing exposure to sectors viewed as vulnerable to economic headwinds.
Geopolitical uncertainty remains one of those headwinds.
Both the Nikkei and Topix reached record highs last week amid optimism that the United States and Iran could move closer to a peace agreement. However, negotiations remain fragile, with Washington and Tehran continuing to disagree on several major issues.
“Uncertainty regarding the situation in the Middle East seems to be intensifying,” said Maki Sawada, a strategist at Nomura Securities.
The region remains critical to global energy markets, and any prolonged disruption could reignite inflation concerns, pressure corporate margins, and complicate monetary policy decisions worldwide. Those concerns help explain why investors continue to show caution toward large segments of the market even as AI-related shares surge.
Interestingly, not all semiconductor-related stocks participated in Monday’s rally. Chip-testing equipment maker Advantest fell 1.9%, while cable and electronics supplier Fujikura declined 2%.
Their weakness highlights another emerging feature of the AI trade: investors are differentiating between companies directly benefiting from spending growth and those whose exposure is viewed as more indirect.
The broader significance of Monday’s trading extends beyond Japan. Global equity markets are undergoing a historic reallocation of capital toward AI infrastructure, semiconductors, data centers, and cloud computing. Similar trends are visible in the United States, where companies tied to AI have accounted for a disproportionate share of stock market gains over the past two years.
Japan’s market is now following the same pattern, with SoftBank becoming the country’s clearest proxy for the AI investment cycle.
The company’s rise above Toyota marks more than a shift in market capitalization rankings. It is seen as a reflection of a changing view among investors about where future economic value will be created. For much of the past half-century, Japan’s stock market was defined by manufacturers, exporters, and industrial giants. Increasingly, it is being shaped now by companies building the infrastructure required to power artificial intelligence.