SoftBank Overtakes Toyota to Become Japan’s Largest Company

Ololade Adeyanju/

SoftBank has overtaken Toyota to become Japan’s most valuable listed company, ending the carmaker’s more than two-decade reign at the top as investor enthusiasm for artificial intelligence continues to reshape global markets.

The milestone was reached on Monday after shares in SoftBank surged to a record high, lifting the technology investment giant’s market capitalisation to approximately ¥48.8 trillion ($307 billion), above Toyota’s ¥45.9 trillion ($288 billion).

The development marks a symbolic shift in Japan’s corporate hierarchy, highlighting how investors are increasingly rewarding companies linked to AI and semiconductor technologies over traditional industrial heavyweights.

Toyota had held the title of Japan’s largest company by market value since 2003.

SoftBank’s shares jumped more than 14 percent in a single trading session after the company unveiled plans to invest up to €75 billion over five years in artificial intelligence infrastructure in France.

The announcement boosted confidence in founder and chief executive Masayoshi Son’s long-term AI strategy and helped propel the stock more than 85 percent higher since the start of the year.

According to the Financial Times, the company’s rise reflects growing global investor appetite for AI-related assets, particularly those linked to data centres, advanced semiconductors and generative AI platforms.

SoftBank’s extensive exposure to AI comes through its controlling stake in chip designer, Arm, and its significant investment in OpenAI, the creator of ChatGPT.

The rally also helped push Japan’s benchmark Nikkei 225 index above the 67,000 mark for the first time, underscoring the strength of the AI-driven market boom.

However, analysts noted that gains remain heavily concentrated in a small number of technology-related stocks rather than being broadly spread across the market.

Jesper Koll, a director at Monex Group, said the changing order among Japan’s corporate giants reflected the current mood of investors, with risk-taking and visionary leadership receiving greater market rewards than the steady, incremental approach traditionally associated with industrial companies.

SoftBank’s ascent has also been supported by rising valuations of its AI-related holdings.

Investors have become increasingly optimistic about the future prospects of OpenAI and Arm, both of which are seen as central beneficiaries of the rapid expansion of artificial intelligence technologies worldwide.

Despite the euphoria surrounding AI, some analysts have cautioned that valuations across the sector have risen sharply and will ultimately need to be justified by sustained earnings growth and commercial adoption.

Nevertheless, for now, the AI trade continues to dominate investor sentiment, helping propel SoftBank to a position few would have predicted only a few years ago.

For the first time in more than 20 years, Japan’s most valuable company is no longer an automotive manufacturer but a technology investment group whose future is tied to the promise of artificial intelligence.