Nikkei Sinks 2.65% to Near Three-Month Low as AI Spending Doubts Hit Tokyo Electron, SoftBank

Japan’s Nikkei 225 tumbled 2.65% on Thursday to finish at 62,907.84, its weakest close in nearly three months, as investors dumped chip and artificial intelligence stocks over doubts about the payoff from heavy AI investment, Italian business daily Il Sole 24 Ore reported. The slide wiped out the index’s 0.9% gain from Wednesday.

The sell-off built through the session. Reuters reported the tech-heavy benchmark was down only 0.8% at 64,128.54 in early trade, before losses deepened in the afternoon as caution over semiconductor demand spread across the market.

Chip and AI names lead the slide

Index heavyweights bore the brunt of the selling. Chip equipment maker Tokyo Electron dropped about 7%, while SoftBank Group lost 6.9% and chip tester Advantest fell 6%, according to market data compiled by Trading Economics and other market reports.

Suppliers tied to the AI hardware chain fared worse. Resonac Holdings was the Nikkei’s biggest loser, sliding more than 11%, followed by substrate maker Ibiden, down about 9.5%, and Screen Holdings, which shed more than 8%, Investing.com data showed.

Investors had already turned wary after US chip equipment maker Lam Research slipped in after-hours trading despite solid results, Reuters said. Iwai Cosmo Securities analyst Kazuyoshi Saito told the news agency there were lingering worries that Chinese customers had rushed to buy chipmaking tools ahead of expected tighter regulation, a pull-forward he said the market had not fully priced in.

Nomura Securities equities strategist Wataru Akiyama said “there’s quite a lot of caution among investors” over whether AI capital spending will continue into 2027, according to Reuters.

A handful of stocks bucked the trend. Cybersecurity firm Trend Micro jumped about 8.7% after critical vulnerabilities in the PHP programming language were disclosed, while IT services provider SHIFT gained roughly 8.6% and consultancy BayCurrent added about 3.8%.

Oil and bond yields add pressure

The macro backdrop offered little support. Il Sole 24 Ore pointed to Brent crude climbing above US$110 a barrel and elevated US Treasury yields as additional weights on sentiment, alongside fears over the rising cost of AI and data-centre infrastructure. Investing.com data showed December Brent futures up 2.34% at US$111.37 a barrel during the Tokyo session.

Breadth was firmly negative, with decliners outnumbering advancers on the Tokyo exchange by 2,092 to 1,404, according to Investing.com.

What’s next

Attention now turns to Japan’s corporate earnings season, with many companies due to report second-quarter results in the coming weeks. Chipmakers and AI infrastructure suppliers, which lifted their profit outlooks earlier this year on data-centre demand, will be under scrutiny for any sign that orders are cooling.

Further US technology results and moves in oil prices are also likely to steer Tokyo trading, as investors weigh whether the AI spending boom can last into 2027.

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