SoftBank stock continued its strong downward trend, while its bond yields jumped as concerns about the artificial intelligence (AI) business continued. It dropped to ¥4,305 on Thursday, its lowest level since April this year and 53% below its highest point this year.
SoftBank’s bond yields have also continued rising. A $500 million bond maturing in 2035 is yielding 6.34%, up sharply from the year-to-date low of 5.069%. Those expiring in 2036 are yielding 9.3%, a sign that investors are demanding a higher return.
SoftBank stock has dropped because of the AI jitters
Masayoshi Son’s SoftBank has become one of the biggest players in the booming artificial intelligence industry. In January last year, the company teamed up with OpenAI and Oracle in the Stargate project, which aims to invest $500 billion in US data centers.
After that, the company invested $64.6b billion in OpenAI, taking a 13% stake in the company. Its goal is to invest up to $100 billion in the company, a move that pushed S&P Global to downgrade its credit rating.
SoftBank’s investment in OpenAI is facing some headwinds. While ChatGPT maintains a leading market share in the AI space, its market share has narrowed in the past few months. Anthropic’s Claude has become a major competitor. At the same time, ChatGPT is facing stiff competition from companies like DeepSeek and Moonshot.
These trends are being seen in its finances. Recent reporting showed that OpenAI’s annualized revenue was below $50 billion, $20 billion lower than what analysts were expecting. Anthropic, on the other hand, made over $16 billion in the third quarter.
These numbers explain why OpenAI has postponed its IPO to next year, with Sam Altman hoping to turn things around.
Fears that the AI bubble may burst
Meanwhile, SoftBank stock is under pressure as the AI Stock Bubble Index continues rising. Data shows that the index has jumped to the extreme level of 74, and the upward trend will continue.
As a result, some analysts, including well-known names like Ken Griffin and Ray Dalio, have warned that this bubble may burst soon. Dalio believes that the potential cause of the bubble to burst is the rising bond yields.
Gartner has also warned about the gap between spending and revenue. The company believes that AI infrastructure companies would need to generate $8.5 trillion in revenue to cover the capital spending. It predicted that the total revenue will not be more than $3.6 trillion.
SoftBank share price technical analysis
SoftBank chart | Source: TradingView
The daily chart shows that the SoftBank stock has been in a strong sell-off in the past few months. It has dropped from ¥9,063 in June to the current ¥4,305. It dropped below the important support level of ¥4,480, its lowest level on July 30th.
The stock has slumped below the 50-day and 200-day moving averages, which are about to form a death cross pattern. This pattern normally leads to more downside.
SoftBank has moved below the Supertrend indicator and the Ichimoku cloud. Therefore, the most likely scenario is where it drops further, potentially to the psychological level of ¥4,000.
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