SoftBank Shares Drop After $5.8 Billion Nvidia Stake Sale Amid AI Valuation Concerns

SoftBank Group Corp. (TYO:9984) shares fell sharply on Wednesday after the Japanese tech giant confirmed it had sold its entire stake in artificial intelligence leader NVIDIA Corporation (NASDAQ:NVDA). The divestment overshadowed SoftBank’s stronger-than-expected second-quarter earnings, despite robust profits from its multi-year push into AI and technology ventures.

The company revealed it sold 32.1 million Nvidia shares in October for $5.8 billion, signaling plans to reallocate capital toward new AI investments. However, the timing of the sale raised investor concerns about soaring AI valuations and the possibility of a bubble forming in the sector. Nvidia’s stock, which had already seen steep declines through October and early November, dropped another 2.9% overnight.

SoftBank’s shares tumbled as much as 10% to 20,415 yen during Tokyo trading, marking the biggest drag on the Nikkei 225 index, which ended slightly higher. By 19:49 ET (00:49 GMT), SoftBank shares were still down 5.4% at 21,450 yen.

The tech selloff coincided with mounting warnings from major U.S. banks and investors about inflated equity valuations in the AI space. Investor Michael Burry, known for predicting the 2008 financial crash, reportedly opened short positions against Nvidia and Palantir Technologies Inc. (NASDAQ:PLTR), echoing his recent caution over excessive market optimism.

SoftBank’s decision comes amid its broader $500 billion plan to develop AI data center infrastructure in the U.S., alongside a massive $40 billion investment in OpenAI. While the company continues to double down on artificial intelligence, its Nvidia exit highlights growing caution among investors who fear that AI’s meteoric rise could soon face a major correction.