Japan's Nikkei Stock Average climbed to a new record, with SoftBank Group shares experiencing a significant surge. This market movement follows Oracle's announcement of substantial AI-related deals, highlighting strong investor confidence in the growth trajectory of artificial intelligence infrastructure.

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Nikkei Index Reaches New High, SoftBank Group Surges Amid AI Infrastructure Deals

Introduction: Japanese Equities Advance on AI Optimism

U.S. equities closed higher on Thursday, with Japan's Nikkei Stock Average advancing to a new record high. The market's upward momentum was significantly bolstered by investor enthusiasm surrounding artificial intelligence (AI) infrastructure development, which propelled key technology stocks, most notably SoftBank Group, to substantial gains. The broader market sentiment remains bullish, particularly for AI-related technology stocks and the wider Japanese market.

Market Performance in Detail: Nikkei and SoftBank's Gains

On Thursday, the Nikkei Stock Average (.N225) rose 1.22%, closing at 44,372.50, marking a fresh all-time high. Earlier in the session, the index touched an intraday record of 44,396.95. In contrast, the broader Topix (.TOPX) index saw a more modest gain of 0.22%, closing at 3,147.76. This disparity underscores the targeted nature of the current market rally, heavily weighted towards specific growth sectors.

Driving a significant portion of this surge was SoftBank Group Corp. (9984.T), whose shares jumped 9.98% to 17,905 JPY ($121.14) on the Tokyo exchange. This single-day performance contributed to massive year-to-date gains of 93.90%, positioning SoftBank shares for an all-time closing high. The company's impressive performance is directly attributed to its strategic involvement in major AI infrastructure initiatives.

Catalyst for Growth: Oracle's AI Deals and the Stargate Project

The catalyst for SoftBank Group's strong showing and the broader market optimism stemmed from its partner Oracle Corp. (ORCL). Oracle announced exceptional first-quarter results, revealing a substantial $455 billion backlog in Remaining Performance Obligations (RPO), representing a remarkable 359% year-over-year increase. This backlog is largely driven by four multi-billion-dollar contracts with AI companies requiring extensive cloud infrastructure.

Central to these developments is the "Stargate" project, a massive $500 billion AI infrastructure venture involving Oracle, OpenAI, and SoftBank Group. This collaboration aims to establish extensive AI data centers across the United States, planning to deliver 4.5 gigawatts of data center capacity. SoftBank Group is identified as a key financial partner in this initiative, with its CEO, Masayoshi Son, slated to serve as the project's chairman, taking financial responsibility while OpenAI manages operational oversight. The project includes a $300 billion cloud computing agreement between OpenAI and Oracle, set to span five years starting in 2027. Following these announcements, Oracle's stock experienced a significant rally, soaring between 36% and 40%, reaching record highs and pushing its market capitalization close to $1 trillion.

Broader Market Implications and AI Sector Momentum

These significant AI infrastructure deals underscore the immense and escalating demand for AI computing power, driving substantial investments in data center and cloud infrastructure. This trend marks a pivotal strategic battleground in the global AI race. The Stargate initiative alone is projected to create over 100,000 American jobs, further highlighting its economic impact.

Oracle anticipates its cloud revenue to grow by 77% this fiscal year, projecting $18 billion in cloud revenue for 2025 and setting an ambitious long-term target of $144 billion by 2030. This strategic positioning allows Oracle to become a critical supplier in the burgeoning AI infrastructure market, while also enabling OpenAI to diversify its cloud service providers, reducing reliance on any single vendor.

Analyst Perspectives on AI-Driven Valuations

Analysts have responded positively to these developments. Jose Torres, senior economist at Interactive Brokers, noted:

"Investors are also enthusiastic following Oracle providing a blockbuster outlook for future revenues associated with artificial intelligence, which is propelling confidence that the tech-fueled bull market has further to run."

Andrew Jackson of Ortus Advisors commented on SoftBank's performance:

"Expect a nice bump higher for Softbank Group on this after its 7.3% move higher yesterday as investors joined the dots between this and Oracle's connection, when only months ago Masayoshi Son [SoftBank chief executive] and Larry Ellison [Oracle chairman] stood together as Trump announced the Stargate program."

Morgan Stanley analysts have also identified Japanese equities poised to benefit from AI advancements, categorizing companies like Sony Group Corp, Sumitomo Mitsui Financial Group Inc, Sohgo Security Services Co Ltd, and Jac Recruitment Co Ltd as "Adopters" due to their strong AI integration.

Potential Risks and Future Outlook

Despite the current bullish sentiment, some analysts point to potential risks. Masayoshi Son's "all in" strategy on OpenAI echoes past high-risk ventures for SoftBank, such as its significant loss with WeWork. Concerns exist regarding OpenAI's financial sustainability, with projections indicating the company could utilize $115 billion by 2029 and questions surrounding its ability to meet massive financial obligations like the $300 billion cloud contract with Oracle.

Additionally, Oracle's financial health bears scrutiny, given its high debt-to-equity ratio of 427%. The immense energy demands associated with the new, power-hungry data centers required for these AI initiatives also present a significant long-term concern. Investors will closely monitor Oracle's future earnings reports, the execution and capital deployment of the Stargate project, and the overall trajectory of AI demand and profitability as these ambitious ventures unfold.

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[1] Nikkei Notches Another Record. SoftBank Surges as AI Hopes Drive Bull Run.[2] Japan's Nikkei Stock Average Hits Record High as SoftBank Surges on AI Cloud Growth Bets (UPDATE 1)[3] SoftBank Rockets 10% On Tokyo Exchange As Oracle's $455 Billion AI Stargate Deals Spark Investor Frenzy - Benzinga

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Sep 17 2025, 17:27

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Sep 17 2025, 17:26

SoftBank Group Shares Advance Amid AI and Semiconductor Focus, Valuation Under Scrutiny

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Sep 17 2025, 17:26

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