New Delhi, Nov 5 (IANS) Shares of Japan’s SoftBank Group tumbled more than 13 per cent on the Tokyo Stock Exchange on Wednesday, as a broader sell-off in technology stocks hit investor sentiment.

The sharp fall followed Tuesday’s 7 per cent decline, wiping out nearly $50 billion in SoftBank’s market capitalisation over just two days.

The slump came amid rising concerns over the high valuations of AI and semiconductor companies, which triggered a sell-off on Wall Street earlier this week.

Despite the steep decline, SoftBank remains a multibagger stock, having surged nearly 206 per cent in the past six months and 154 per cent over the last year.

SoftBank has built a diverse portfolio of AI-driven businesses, spanning infrastructure, semiconductors, and software applications.

The company holds a controlling stake in UK-based Arm Holdings, whose chip designs power many mobile and AI processors.

Recently, it also acquired Ampere Computing to boost its AI data centre capabilities.

Other semiconductor and AI stocks in Asia also saw heavy losses on Wednesday. Semiconductor testing firm Advantest dropped over 8 per cent, while chipmaker Renesas Electronics fell around 6 per cent. Shares of Nasdaq-listed Arm Holdings slid 4.71 per cent overnight.

According to market reports, the fall in AI and semiconductor stocks followed an 8 per cent drop in US software company Palantir’s shares, despite the firm reporting strong third-quarter results.

Analysts say investors are becoming cautious as the ongoing AI rally has pushed valuations to unsustainable levels.

The S&P 500’s forward price-to-earnings ratio has now climbed above 23 — its highest since the dot-com bubble in 2000, as per data from FactSet.

Adding to the bearish sentiment, investor Michael Burry — famous for predicting the 2008 financial crisis — disclosed short positions in Palantir and Nvidia, both major beneficiaries of the AI boom.

Following the revelation, Nvidia shares fell 4 per cent, and AMD dropped 3.7 per cent in after-hours trading.

Market analysts are warning that the growing excitement around artificial intelligence may be fueling a new tech bubble.

Many experts believe the current surge in AI stock prices mirrors the speculative mania of the late 1990s dot-com boom, with valuations far exceeding realistic earnings expectations.

–IANS

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