Kioxia Falls 11.55% and SoftBank Nearly 9% as Tokyo AI Stock Selloff Widens

Key Facts

Technology and artificial intelligence stocks in Tokyo fell on Wednesday, November 4, with Kioxia down 11.55% and SoftBank Group nearly 9%, according to a Reuters report. The selloff came as the Nikkei fell to its lowest level in more than 3 months. The report attributed the pressure to concerns that Democratic gains in the U.S. midterm elections could lead to tighter regulation of data center projects and slow spending on AI infrastructure. The concern centered on the potential impact of these policies on a sector that depends on data center expansion and investment in its equipment. Losses spread from AI-related companies to semiconductor stocks and their equipment suppliers.

Kioxia, which specializes in memory chips, recorded the steepest decline among the companies cited in the Reuters report, with its shares falling 11.55% during the session. SoftBank, a technology investor, fell nearly 9% in the same trading. The declines show that the selloff encompassed both a chipmaker and a prominent investor in the technology sector, as concerns grew about the potential impact of regulation on AI investments. Shares of semiconductor testing equipment makers also posted sharp losses. Advantest fell 7.8%, while Tokyo Electron declined 6.28%, according to Reuters.

The Japan Times reported that the technology-heavy Nikkei 225 fell as much as 4.8% during trading on November 4. The newspaper listed Kioxia and AI stocks among the session's worst performers, alongside Taiyo Yuden, which specializes in multilayer ceramic capacitors. According to the newspaper, losses in some semiconductor and AI stocks, from Kioxia to Taiyo Yuden, exceeded 13%. This differs from the 11.55% decline Reuters reported for Kioxia, while the newspaper described the breadth of the drop among the worst-performing stocks. The index came under pressure alongside broad selling in stocks whose valuations are tied to expectations for growth in AI investment.

Masahiro Yamaguchi, head of investment research at SMBC Trust Bank, said markets had already begun pricing in the possibility that a Democratic advantage would pressure AI stocks. He added: "Global stock markets have already begun pricing in the view that a Democratic advantage will be a headwind for AI stocks." The assessment links moves in Japanese shares to investor expectations for the U.S. regulatory environment and infrastructure spending. The concerns cited by Reuters specifically involved regulation of data center projects and the possibility of slower AI-related spending. As a result, pressure extended to companies that make chips and testing equipment, as well as technology investors.

EL7 data records Kioxia, listed under the ticker 285A.T, closing at 10,735 yen on November 4. The close provides a reference for the share price at the end of the session, while the declines cited by Reuters refer to the stock's performance during trading in its report. On Japan's monetary policy calendar, the Bank of Japan lists publication of the minutes from its September 17 and 18 policy meeting for November 5 at 8:50 a.m. Japan time. The minutes are due a day after the selloff and offer a look at discussions from the central bank's previous meeting. In the United States, the Federal Reserve calendar says minutes of regular Federal Open Market Committee meetings are released 3 weeks after a policy decision. The 2026 calendar includes meetings on October 27 and 28 and December 8 and 9.