Softbank's stock plummets as AI investment model faces scrutiny

On October 22, 2026, SoftBank's stock fell 6.7% during trading, with a cumulative decline of 50% since its June 2 high. This decline reflects growing investor concerns over the company's ability to sustain heavy AI investments amid rising financing costs. SoftBank's credit risk has also increased, with credit default swap prices for its debt reaching a four-year high on October 20. Market skepticism was heightened by CoreWeave's debt crisis, which exposed broader industry financing risks. Nagomi Capital's Chief Investment Officer, Masaru Muramatsu, highlighted the growing focus on AI firms' financial health, noting SoftBank's heavy reliance on debt financing. The company's AI investments span infrastructure, energy, and robotics, with most funded through borrowing. SoftBank's stock has dropped over 30% this month, erasing all September gains. The firm issued $111 billion in junk bonds in September, setting a record for corporate junk bond issuance. Despite its $650 billion investment in OpenAI, SoftBank faces mounting competition from Chinese AI firms offering similar models at lower costs.