TL;DR
SoftBank briefly overtook Toyota as Japan’s most valuable company, the first time since February 2000 when dot-com was about to collapse. Kioxia went from 154th to top three in a year. The AI-or-nothing rally is reshuffling Japan Inc at alarming speed.
SoftBank knocked Toyota off its perch as Japan’s most valuable company last week, after a stock rally inflated the conglomerate’s market capitalisation by more than $120 billion in six months. Three days later, Toyota reclaimed the top spot.
The last time SoftBank held that position was February 2000, when the dot-com bubble was on the cusp of collapse. Within a year, SoftBank’s shares had fallen roughly 90%.
The reshuffle in numbers
Kioxia, the NAND flash memory maker, was Japan’s 154th largest company a year ago. It now sits firmly in the top three, having leapfrogged Nintendo, Sony, Panasonic, and Canon on the back of surging AI-driven memory demand.
Murata Manufacturing, which makes the tiny multilayer ceramic capacitors that stabilise power in electronic devices, and chip tester Advantest have both joined Japan’s revamped AI-flavoured top 20. Nintendo, despite releasing the fastest-selling console of all time, has fallen more than 20 places and is barely holding onto the top 30.
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The dot-com parallel
In early 2000, Japan’s top 20 was dominated by internet winners: NTT and its subsidiaries, Hikari Tsushin, SoftBank, Fujitsu, and NEC, several of which had not even been in the top 50 a year earlier. By the end of 2001, Hikari Tsushin had fallen to 615th.
“The dot-com bubble is certainly relevant now,” said Chris Smith, who co-manages the Japan Value Fund at London-based Polar Capital. “The breadth of market returns is so narrow and I’m not sure how much longer that can continue.”
The AI-or-nothing rally
The concentration is acute in Japan. Chip makers and component companies have soared on data centre demand, while downstream gaming and consumer electronics firms have struggled as material costs balloon. Automakers, a pillar of Japanese manufacturing, have lagged behind under tariff and geopolitical pressure.
On Monday, while SoftBank and Kioxia fell more than 6% in an AI-led selloff, Nintendo, Capcom, and Recruit rallied. Japan’s broader Topix index outperformed the tech-heavy Nikkei 225 by more than a percentage point.
Why this might not be 2000
Japan’s large number of AI laggards may be what saves its market from a dot-com-like implosion. Smith argued that companies left behind by the AI rally offer “very strong relative returns” when the inevitable rotation comes.
SoftBank’s reign lasted three days this time, compared with more than two weeks in 2000. Kazuhiro Sasaki, head of research at Phillip Securities Japan, said Toyota’s resilience, holding the top spot despite its shares sliding more than 10% this year, shows that Japanese manufacturers still hold value beyond the AI hype.
The test ahead
A string of mega tech IPOs in the coming months will test the rally’s durability. SpaceX lists this week. OpenAI and Anthropic have filed. If the market absorbs them without correction, the AI trade may prove more durable than dot-com.
If it does not, the parallel will sharpen. The dot-com bubble comparison is not a prediction. It is a pattern that describes what happens when a narrow set of companies absorbs most of the capital in a market, and the question is whether this time the underlying revenue justifies the valuations. In Japan, where Kioxia went from 154th to third in a year, that question is louder than anywhere else.
Stephan is the sports journalist for the Maple Grove Report.
May 21, 2026
