SoftBank shares fall 40% amid AI bubble concerns; 54% see AI assets overvalued
SoftBank’s stock tumble has become a barometer for wider unease in the tech‑driven market. A 40% slide in the conglomerate’s shares this week sent a ripple through investors who have been watching AI‑centric valuations with growing suspicion. While the company’s own AI bets remain opaque, the broader sentiment is shifting from optimism to caution.
Recent data points reinforce that shift: fund managers are flagging excessive pricing, and venture capital activity appears increasingly frantic. The numbers suggest the hype may be outpacing fundamentals, prompting analysts to question whether the sector is perched on a speculative edge. Against that backdrop, Bank of America’s Global Fund Manager Survey in October revealed that 54% of respondents believed AI‑related assets were in a bubble territory, and 60% said global equities were overvalued, Bloomberg cited.
“Among other signs of rampant speculation, frantic venture capitalists are throwing …”
Besides, Bank of America's Global Fund Manager Survey in October revealed that 54% of respondents believed AI-related assets were in a bubble territory, and 60% said global equities were overvalued, Bloomberg cited. "Among other signs of rampant speculation, frantic venture capitalists are throwing money at AI startups at multi-billion-dollar valuations without even being told their plans," Ben Inker, partner at GMO, the Boston-based investment management firm, wrote in their monthly newsletter. He further noted that equity investors are increasing the valuation of large corporations by hundreds of billions of dollars through investment deals with OpenAI, a company whose revenues would have to rise a hundredfold to fulfil its commitment. For SoftBank, its investments in AI companies, such as Arm, OpenAI, Perplexity, Databricks, and ByteDance, among others, make it more vulnerable to AI-related fears.
SoftBank’s 40% slide underscores how fragile AI‑centric valuations have become. Yet investors aren’t just reacting to one firm; a broader unease is evident. Between Oct.
31 and Nov. 26 the conglomerate’s shares tumbled sharply, reflecting its deep exposure to AI startups that many now deem overpriced. Bank of America’s Global Fund Manager Survey, released in October, found 54% of respondents labeling AI‑related assets as bubble‑prone, while 60% warned that global equities overall are overvalued.
Could the market correction be a temporary wobble or a signal of deeper mispricing? Frantic venture capitalists are still throwing money at AI ventures, but the surge in speculative activity raises questions about sustainability. The earlier focus on President Trump’s tariff threats has receded, supplanted by doubts over whether the AI hype can translate into lasting returns.
Unclear whether SoftBank’s decline will stabilize or deepen as investors reassess risk. For now, the data suggest caution, not optimism, dominates the conversation around AI investments.
Further Reading
- SoftBank shares plunge 40% as investors reassess AI valuations and tech bubble risks - Reuters
- 54% of investors believe AI assets are significantly overvalued, survey shows - Bloomberg
- Tech sector faces reality check as SoftBank's AI-heavy portfolio triggers market correction - TechCrunch
- AI bubble concerns mount: How SoftBank's decline signals broader market unease - CNBC
- Investor sentiment shifts on artificial intelligence: Overvaluation fears drive tech selloff - Financial Times
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Common Questions Answered
Why did SoftBank's shares fall by 40% according to the article?
SoftBank's shares dropped 40% amid growing concerns that AI‑centric valuations are inflated, as investors reacted to broader market unease and the company's opaque AI investments. The slide reflects heightened suspicion that the firm's exposure to pricey AI startups may be overvalued.
What did Bank of America's Global Fund Manager Survey reveal about AI‑related assets?
The survey, released in October, found that 54% of fund managers believed AI‑related assets were in bubble territory, indicating widespread skepticism about their pricing. Additionally, 60% of respondents warned that global equities overall were overvalued, underscoring broader market concerns.
How are venture capitalists described as behaving toward AI startups in the article?
Venture capitalists are portrayed as frantic, pouring money into AI startups at multi‑billion‑dollar valuations without clear business plans. This aggressive funding approach is cited as a sign of rampant speculation fueling the AI valuation bubble.
What time frame does the article mention for SoftBank's sharp share tumble?
The article notes that SoftBank's shares tumbled sharply between October 31 and November 26, a period that highlighted the company's deep exposure to AI startups deemed overpriced by many investors. This decline underscores the fragility of AI‑centric valuations.