SoftBank stock has halved from June high as AI funding worries grow

SoftBank's stock fell as much as 6.7% in a day, and is now down 50% from its record high on June 2. It has lost over 30% this month, wiping out all of September's gains.

Investors are questioning whether SoftBank can keep pouring huge money into AI. US cloud provider CoreWeave is stuck in debt trouble, with its bonds sinking to distressed levels, exposing funding risks across the AI industry and making investors more nervous.

A manager at Nagomi Capital said investors are paying closer attention to AI firms' financial health, and SoftBank's heavy reliance on borrowing makes its risk stand out. The cost of insuring its debt against default has hit a near four-year high.

SoftBank's AI bets span infrastructure, energy and robots, mostly funded by debt. It has put nearly $65 billion into OpenAI, which now faces Chinese rivals offering similar models at lower prices. In September, SoftBank sold $11.1 billion of junk bonds, a corporate record.