SoftBank Plunges 10% as OpenAI Loan Hits Snag, Asia Tech Sinks
SoftBank fell 10% after its $6 billion OpenAI-backed margin loan hit a snag. Asian chip stocks from Advantest to SK Hynix slid as AI fundraising siphons capital from public tech names.
SoftBank Group Corp. fell 10% in Tokyo on Wednesday, leading a broad slide in Asian technology stocks as a brief Wall Street rebound in chipmakers evaporated and the Japanese investment giant's effort to secure a $6 billion margin loan backed by its OpenAI stake hit a snag. Bloomberg News reported SoftBank is now exploring alternative funding options, though it may revisit the loan later.
Japanese chip equipment makers Advantest Corp. and Renesas Electronics Corp. dropped 3.8% and 3.4%, respectively. In Seoul, SK Hynix Inc. lost more than 8%, Samsung Electronics Co. fell 7.45%, and Samsung SDI Co. declined over 5%. LG Display Co. slid nearly 9%. Taiwan Semiconductor Manufacturing Co. (TSM), the world's largest contract chipmaker, fell about 2%, while Apple Inc. supplier Hon Hai Precision Industry Co. lost more than 4%.
The selloff tracked a weaker session in New York, where the Nasdaq Composite fell 0.97% and the S&P 500 slipped 0.26%. A one-day rally in semiconductor stocks faded quickly, with the iShares Semiconductor ETF dropping 1%.
Andrew Jackson, equity strategist at Ortus Advisors, said the latest volatility could push investors into defense names, particularly in Japan, where the government is expected to boost military spending. "With retail punters gnashing their teeth and looking for something new to play with, heavies could snap back into focus after their recent pullback," Jackson said, citing Mitsubishi Heavy Industries Ltd., Kawasaki Heavy Industries Ltd., IHI Corp., and Japan Steel Works Ltd. as potential beneficiaries.
AI-related fundraising is siphoning capital from existing public tech stocks. Upcoming listings from SpaceX, Anthropic, and OpenAI could absorb money that previously flowed into publicly traded companies. OpenAI confidentially filed for an IPO on Monday. SpaceX is scheduled to begin trading Friday in what is expected to be the largest IPO on record. Some investors see the listing as another catalyst for the AI rally; others worry its $1.75 trillion valuation signals overheating.
Advantest Corp. (ATEYY) carries an Alpha Score of 72/100, the highest among the major chip-equipment names tracked by AlphaScala. TSM scores 68/100. Both carry a Moderate label in the Technology sector.
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