Softbank’s stock surged by over 135% in just four months, raising alarms among investors.

Some investors feel SoftBank shares may have overheated following a 135% rally in only four months. This month, the company’s stock has added more than ¥7 trillion, or about $47 billion.

Additionally, its momentum indicator, the 14-day RSI, spiked to 90 on Monday, a reading that often signals overbought conditions. The indicator had previously hit such levels in February 2024 and again in July, each time ahead of sharp corrections.

Lee says he is not “overly bullish” on Softbank

Softbank’s shares are further above consensus price targets than at any time since 2010, a pattern that in the past has preceded pullbacks. Some analysts, including Angus Lee, a fund manager at Sparx Asset Management, who recently bought SoftBank shares, believe the company’s stock rose too quickly.

Lee stated the firm’s stock appears “overheated in the short term,” noting that he isn’t overly bullish. He even admitted to taking profits recently. However, he argued that he still sees long-term appeal in SoftBank, citing possible IPOs of companies.

Kazuhiro Sasaki, head of research at Phillip Securities Japan Ltd, also commented on Softbank’s stock surge, saying, “It suggests the rally is more than just about the fundamental factors.” He explained that some demand for SoftBank came as investors broadened exposure to the Nikkei 225, which advanced to record levels this week. Though at around a 30% discount to NAV per share—down from 48% in late July—SoftBank’s shares look less compelling from a valuation perspective.

Softbank plans to buy a $2 billion stake in Intel

SoftBank recently revealed plans to acquire a $2 billion (£1.5 billion) stake in Intel, driving the chipmaker’s shares up. However, Softbank’s stock dipped 5% on the same day. On the other hand, Intel’s stock rose by over 5% after-hours trading in New York on Monday.

The announcement followed reports that the Trump administration is exploring a 10% stake in Intel by exchanging government grants for equity as previously reported by Cryptopolitan. First reported last week, the proposed deal aims to back Intel’s plans for a flagship manufacturing hub in Ohio.

A White House spokesman, however, cautioned that the arrangement “should be treated as speculation” until officially confirmed. The administration has previously voiced concerns over Intel’s leadership, with President Trump reportedly urging CEO Lip-Bu Tan to resign amid questions about the company’s strategic direction.

Nonetheless, Softbank is expected to pay Intel $23 per share for its deal. However, the firm’s shares dwindled 9% Wednesday, as tech stocks in Asia declined. Shares in the Japanese tech-focused firm extended their losses into a second session despite the Intel news. 

Overall, Japanese tech shares broadly weakened, including Advantest, which sank as much as 6.27%. Renesas Electronics was down 2.46%, and Tokyo Electron fell 0.75%. The overnight selloff in Nvidia also weighed on US technology stocks and, in turn, pressured tech names in South Korea, Taiwan, and Hong Kong. Taiwan’s TSMC eased 1.69%, and Hon Hai Precision Industry (Foxconn) lost 2.16%. TSMC still makes Nvidia’s powerful GPUs, while Foxconn has joined Nvidia to establish “AI factories.” 

The decline in these AI and chip companies has worried some analysts. Though Jayson Bronchetti, chief investment officer at Lincoln Financial, insists, “The AI trade may not be breaking, but it could be catching its breath.”

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