SoftBank or the Japanese art of reinvention
To understand why SoftBank was able to topple Toyota, one must look back long before ChatGPT. SoftBank was founded in 1981 as a computer software distributor, then expanded into specialized publishing, followed by the internet, broadband, fixed-line telecoms, and mobile, before entering a new phase dominated by global technology investments.
In its 2025 annual report, the group explicitly states that the "Information Revolution" has now entered a phase where AI is redefining every industry. SoftBank did not become an "AI play" overnight; rather, it operates as a company that has spent four decades repositioning itself across every major technological infrastructure wave.
This chameleon-like nature also explains why the market grants it a unique status. Toyota sells cars; SoftBank sells a promise of presence in the most profitable layers of the next technological wave. In its official history, the group directly links this logic to its major milestones: Yahoo! Japan in 1996, Alibaba in 2000, Yahoo! BB in 2001, the entry into fixed telecoms in 2004, mobility in 2006, Arm in 2016, the launch of the Vision Fund in 2017, and then Stargate and OpenAI in 2025. From an analyst's perspective, SoftBank is no longer just a company; it is a machine designed to absorb dominant technological narratives and convert them into a market asset.
This metamorphosis has accelerated with Masayoshi Son's return to a much more frontal AI strategy. The group is no longer content with financing minority stakes in startups; it also seeks to fund the physical infrastructure required to support the sector's next phase. This gives SoftBank stock a hybrid dimension: part investment firm, part tech conglomerate, and a giant bet on data centers, chips and future AI champions.
What markets are really buying when they buy SoftBank
In its consolidated report for the fiscal year ended March 31, 2026, SoftBank reported net income attributable to shareholders of approximately 5.0 trillion yen, over quadruple the 1.15 trillion a year earlier. The group also posted investment gains of 7.29 trillion yen. As of March 31, 2026, its Net Asset Value (NAV) stood at 40.06 trillion yen, against an investment value of 48.26 trillion yen. Within this portfolio, Arm alone represented 19.15 trillion yen, by far the largest individual asset. This means that a large portion of SoftBank's revaluation is already driven, quite concretely, by Arm's weight within its capital structure.
Arm has become central because it sits at the intersection of two trends the market loves: the explosion in demand for AI computing and the energy pressure surrounding data centers.
The other pillar is OpenAI. SoftBank officially said in late February that it had already invested $34.6bn in OpenAI since September 2024, and committed to adding a further $30bn via SoftBank Vision Fund 2. If these tranches are fully executed, the cumulative investment will reach $64.6bn for an approximate 13% stake. The first 10 billion installment was executed on April 1, and SoftBank confirmed it had secured a $40bn bridge loan to finance this initial ramp-up.
To this is now added European infrastructure. SoftBank announced its commitment to develop and operate 5 GW of AI data center capacity in France, for an investment of up to €75bn, with an initial phase of €45bn for 3.1 GW in the Hauts-de-France region. This announcement served as the immediate catalyst for the stock's surge on June 1.
Toyota remains a giant, but the market treats it as a mature industry
This shift does not mean Toyota is collapsing. The company remains an industrial colossus. In its results for fiscal year 2026, it reported 50.6849 trillion yen in revenue, 3.7662 trillion yen in operating income, and 3.848 trillion yen in net attributable profit, with 9.595 million vehicles sold on a consolidated basis. The group also surpassed 5 million electrified vehicles sold at retail for the first time. In other words, Toyota remains extraordinarily profitable, global, and far from being a company in terminal decline.
The problem for Toyota is that investors are now looking as much at headwinds as they are at volumes. The company forecasts an operating profit of 3 trillion yen for FY 2027, an 800bn yen y-o-y decrease. In its own presentation, it explained that US tariffs already weighed 1.4 trillion yen on the past fiscal year and that it does not anticipate being able to fully absorb new shocks, particularly those related to the Middle East.
A shift that tells the story of tomorrow's Japan
For decades, the country's largest market capitalization reflected the idea of "Japan Inc.": automobiles, exports, manufacturing excellence, cost control, and strong balance sheets. Now, the Japanese market has temporarily placed at the top a group whose value depends primarily on chips, unlisted holdings, software, data centers, and a promise of dominance in AI computing.
This sectoral re-ranking is no longer limited to SoftBank. In the wake of the tech rally, Kioxia, the Japanese memory manufacturer, also exploded on the stock market to the point of briefly overtaking Toyota and establishing itself amongst the country's top market caps.
Ultimately, what is unfolding in Tokyo at the start of summer 2026 is neither the death of Toyota nor SoftBank's definitive ascent to unchallenged supremacy. It is the temporary victory of a promise over a certainty, of a future over a present, and of an asset exposed to the global AI gold rush over an industrial empire that remains massively profitable. Toyota continues to produce, sell, and earn money on a gargantuan scale. SoftBank, meanwhile, now concentrates the market's impatience for what comes next.
