SoftBank Group Corp. (TYO:9984) shares fell sharply on Thursday, tracking a decline in Arm Holdings (NASDAQ:ARM) after the British chip designer– which is among the Japanese conglomerate’s biggest holdings– clocked weak earnings for the December quarter.
The stock was also pressured by concerns over increased competition for artificial intelligence major OpenAI-- another major Softbank holding-- from Google, after parent Alphabet Inc (NASDAQ:GOOGL) clocked strong December quarter earnings and presented a much higher-than-expected capital expenditure budget for 2026.
Softbank slid as much as 7% to 3,909.0 yen, and was among the biggest weights on the Nikkei 225 index, which fell 1%. The stock was also caught in a broader sell-down in technology stocks, amid growing uncertainty over AI and its impact on the software industry.
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Losses in Softbank came tracking an 8% aftermarket decline in Arm’s shares.
The chip designer logged weaker-than-expected licensing revenues for the December quarter. The company generates revenue by selling licenses for its chip technology to majors such as NVIDIA Corporation (NASDAQ:NVDA) and Apple Inc (NASDAQ:AAPL), and also charges them royalties for the tech.
Adding to Arm’s woes, chip supplier Qualcomm presented a weak outlook for 2026, with a surge in global memory prices, due to the AI industry, expected to dent smartphone sales.
Such a scenario bodes poorly for Arm, whose designs are widely used by smartphone manufacturers.
Softbank holds an 87.1% stake in Arm following the latter’s return to public markets in 2023. The company is among Softbank’s biggest holdings, and is also closely tied to the Japanese conglomerate’s AI and chipmaking ambitions.
OpenAI competition concerns grow after Alphabet earnings Additionally, Softbank shares were pressured by concerns over increasing competition for AI startup OpenAI, in which the Japanese conglomerate is heavily invested. Softbank in December completed a $40 billion investment in OpenAI, and was seen considering investing more large amounts in the startup.
Alphabet (NASDAQ:GOOGL), which has emerged as a major rival for OpenAI, clocked strong earnings for the December quarter, and also outlined a much bigger-than-expected capital expenditure budget for 2026.
Alphabet’s print and outlook sparked concerns that its Google Gemini AI offerings will bring even more competition for OpenAI, especially as the latter struggles with profitability and an outsized cash burn.
