AI Momentum Pushes Japan’s Stock Market Into Uncharted Territory

Japan’s stock market reached another historic milestone on Monday as the Nikkei 225 index climbed above 67,000 points for the first time ever. The benchmark advanced 1.1% during morning trading, reflecting continued enthusiasm for companies positioned to benefit from the global artificial intelligence boom.

The move extends a remarkable rally that has transformed market leadership in Japan. While traditional industrial giants and automakers have long dominated investor attention, AI-related businesses are increasingly becoming the primary drivers of market performance. The latest gains came just days after both the Nikkei and the broader Topix index reached fresh all-time highs, underscoring the strength of investor demand for technology-focused assets.

However, the rally was far from broad-based. The gains were heavily concentrated in AI-linked companies, while many sectors of the market struggled to participate.

SoftBank Overtakes Toyota as Japan’s Most Valuable Company

The biggest story behind Monday’s surge was SoftBank Group. Shares of the technology investment giant jumped more than 10%, making it the single largest contributor to the Nikkei’s advance.

The rally followed SoftBank’s announcement that it plans to invest approximately €75 billion over five years to develop artificial intelligence infrastructure in France. Investors interpreted the move as further evidence that founder Masayoshi Son intends to position SoftBank at the center of the next phase of global AI development.

As a result, SoftBank’s market capitalization expanded to roughly ¥47.2 trillion, overtaking Toyota Motor’s valuation of approximately ¥45.7 trillion. Toyota shares declined nearly 5% during the session, helping accelerate the shift in market leadership.

The development is symbolic of a broader change occurring across global equity markets. Investors increasingly favor companies tied directly to AI infrastructure, computing power, and data-center expansion over traditional manufacturing and industrial businesses.

AI Winners Continue to Expand Beyond Semiconductors

The rally was not limited to SoftBank. Investors broadened their focus to include other companies expected to benefit from growing demand for AI servers and computing infrastructure.

Electronic components manufacturer Murata Manufacturing surged more than 14%, becoming the Nikkei’s strongest performer. Market strategists noted that investors are increasingly targeting secondary beneficiaries of the AI ecosystem, particularly companies supplying critical components and hardware used in data centers and advanced computing systems.

The performance of Japan’s information technology sector reflected this trend, with the group advancing more than 4%. Yet the broader market remained mixed. Only 73 of the Nikkei’s 225 constituents posted gains, highlighting how concentrated the AI-driven rally has become.

Even some major semiconductor-related stocks moved lower, suggesting investors are becoming more selective about which companies will capture the largest share of future AI spending.

Can the AI Rally Continue?

While enthusiasm surrounding artificial intelligence remains powerful, some analysts are beginning to question whether valuations are becoming stretched. The rapid rise in AI-related stocks has pushed many companies to record highs, increasing sensitivity to earnings results, growth forecasts, and macroeconomic developments.

Investors also continue monitoring geopolitical risks, particularly uncertainty surrounding negotiations in the Middle East. Although markets remain optimistic about a potential easing of tensions, unresolved issues could quickly affect global sentiment and risk appetite.

For now, however, AI remains the dominant investment theme. SoftBank’s rise above Toyota marks a historic shift in Japan’s corporate hierarchy and highlights how strongly investors believe artificial intelligence will reshape the global economy in the years ahead.