SoftBank Group absorbed a double blow on Tuesday, with a Chinese regulatory veto landing on its planned robotics acquisition just as a broad retreat from artificial-intelligence names gathered pace. The stock was down 3.9% at EUR 22.40, with the day’s decline deepening to as much as -12% at one point in the session.
At the centre of the storm is Beijing’s decision to block SoftBank’s purchase of ABB’s Chinese robotics business. The unit forms part of a wider transaction valued at USD 5.375 billion. Reuters reported that China’s foreign investment security review authority refused to clear the deal, dealing a setback to SoftBank’s ambitions in physical artificial intelligence.
The regulatory hurdle gives the sell-off a company-specific edge that goes beyond the general repricing of AI investments. Investors are now weighing a concrete obstacle to a transaction meant to advance SoftBank’s strategy, though the Chinese ruling does not automatically spell the end of the entire acquisition.
Arm’s Slide and a Sector-Wide Pullback
Pressure was building from several directions at once. Arm, the chip designer in which SoftBank holds a major stake, fell after its latest earnings release, dragging on its parent. Arm reported revenue of USD 1.44 billion for the second quarter of fiscal 2027, a 27% increase year on year. For the third quarter, it guided to USD 1.54 billion — a figure Reuters noted came in close to market expectations.
Japanese AI and semiconductor names were sold across the board, with SoftBank among the stocks hit after US chipmakers had already given ground. Weak Nasdaq 100 futures added to the cautious mood. Reuters also reported concerns over possible Democratic gains in the US midterm elections, which market participants believe could bring stricter rules for data centres and slower spending on AI infrastructure — fears rather than enacted restrictions.
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The combination matters for how the move should be read. SoftBank is being caught up in a wider withdrawal from AI assets while simultaneously digesting a strategic setback of its own. The share price reaction therefore cannot be attributed solely to the Chinese decision.
A Second Transaction Slips
Separately, SoftBank said on 30 October that a planned capital increase at LINE MAN Corporation would be pushed back to the end of January 2027 from the end of October. LY Corporation’s additional purchase of new LINE MAN shares, worth USD 130 million, requires more time to align the agreements, according to the company. SoftBank expects only a minimal impact on the consolidated result for the current fiscal year — a limited earnings effect that should be kept distinct from the strategic blow to the robotics deal.
Jefferies Turns More Constructive
Not every development has been negative. Jefferies upgraded SoftBank to “Hold” from “Underperform” on 28 October, lifting its price target to JPY 7,270 from JPY 3,140.
Attention now shifts to 10 November, when SoftBank reports second-quarter results for fiscal 2026 together with an earnings presentation. The report covers the six months through the end of September. Beyond the takeover plans, the numbers will put the company’s financial trajectory back under the microscope — and investors will be listening closely for what management says about the path of its investment programme.
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