TOKYO, May 8, 2026, 05:05 JST
- Japan’s Nikkei average surged to a record close of 62,833 on Thursday, fueled by strong demand for AI and semiconductor stocks.
- New remarks out of Japan have shifted the rally’s focus to a tougher issue: can Nvidia’s price tag—and the whole AI-chip play—really stand up when it comes to cash returns?
- Investors searching for options beyond Nvidia are lumping Broadcom, AMD, and Arm into the same trade, though that comes with fresh supply, financing, and concentration headaches.
Japan’s AI-chip surge took center stage in Tokyo on Thursday. The Nikkei average jumped a record 3,320 points to close at 62,833, an all-time high, after demand for semiconductor-linked stocks spiked following strong moves in overseas AI and chip names during Japan’s Golden Week. Local media, including TBS, flagged fresh worries that the Nvidia-fueled rally might be racing past underlying fundamentals.
The timing is key here: this trade’s both tight and international. Sankei, via Yahoo Japan’s AI news feed, described the rally as driven by AI and semiconductor stocks, with buying running from the U.S. to South Korea and Taiwan. Still, the report noted worries about the market running too hot.
Shikiho Online took a look at U.S. semiconductor stocks in a report out two days ago, arguing that company-specific “factors” are behind the recent gains—not just the wave around Nvidia. The article dives into three major U.S. chip firms to break down how some have actually outpaced Nvidia’s returns. That puts Broadcom and AMD right into the Japan retail-investor spotlight. Shikiho Online
Economist and investor Emin Yilmaz didn’t mince words in comments to Bunshun Online. “All bubbles collapse,” Yilmaz said, according to a translation from Japanese. He pointed out the oddity of Nvidia’s market cap topping Japan’s GDP, labeling it abnormal. In his view, solid earnings and a bubble aren’t mutually exclusive—a bubble, Yilmaz noted, is simply the market betting that today’s growth is endless. 文春オンライン
Real demand is driving the opposite end of the trade. Nvidia and Corning on Wednesday announced a multiyear deal aimed at ramping up U.S. optical connectivity output for AI data centers—those sprawling hubs packed with chips and servers powering AI. Corning laid out plans to boost U.S. optical capacity by 10x, increase domestic fiber production by over 50%, put up three new plants across North Carolina and Texas, and add upwards of 3,000 jobs.
Nvidia’s Jensen Huang described AI as “the largest infrastructure buildout of our time.” Corning’s CEO Wendell Weeks framed the partnership as evidence that AI is “not just a technology story” but increasingly a manufacturing story, too. The tone leaned promotional, yet what matters is where the money’s headed: AI capital is shifting beyond chips—into fiber, power, land, and industrial facilities.
Broadcom stands out among custom-chip rivals. Back in March, Reuters said the company was eyeing over $100 billion in AI chip sales for 2027. First-quarter revenue climbed 29% to $19.31 billion, with AI-related sales jumping past $8.4 billion, more than double. “Our visibility in 2027 has dramatically improved,” CEO Hock Tan told analysts after results. Reuters
Broadcom isn’t doing what Nvidia does. While Nvidia sells GPUs—the graphics processors behind AI training and inference—Broadcom’s specialty is helping major players like Google and OpenAI convert their own designs into tailor-made AI accelerators, chips engineered specifically for machine-learning tasks. D.A. Davidson’s Gil Luria sees Broadcom’s extended outlook as “an indication of significant growth in demand.” Reuters
But risks aren’t sparing the supply chain either. On Thursday, The Information reported that OpenAI’s $18 billion AI-chip arrangement with Broadcom has stumbled over financing—underscoring just how much these AI expansions lean on hefty funding and revenue bets down the line. Back in October, OpenAI and Broadcom laid out their ambitious plan: roll out 10 gigawatts’ worth of AI accelerators designed by OpenAI, with racks due to start shipping in the second half of 2026 and wrap up by the close of 2029.
Another red flag from Arm: Shares slipped Thursday after the chip designer flagged ongoing smartphone softness and fresh supply snarls for a new AI chip, Reuters reported. CEO Rene Haas told investors Arm has locked in enough capacity to handle the initial $1 billion in demand—no promises after that.
U.S. markets showed a mixed picture—no big celebrations. The PHLX chip index slid 2.4% on Thursday, according to Reuters, with AMD dropping 3.1% and Intel slipping 1.9%. Nvidia and Microsoft, on the other hand, gained more than 2% apiece. That divide highlights how investors are still willing to back clear AI winners, but patience is wearing thin for firms grappling with supply or execution challenges.
The risk here is clear. Should AI users drag their feet on payments, chipmakers, fiber suppliers, and utilities taking advantage of the current data-center boom could find themselves facing bloated valuations and buyers staring down steep costs. Yilmaz, speaking to Bunshun, expressed skepticism that AI firms can generate revenue fast enough to justify the rapid-fire investment, pointing out that recouping these outlays would demand a massive pool of paying customers shelling out high monthly fees.
Next up for Tokyo: earnings. “Short-term overheating” is showing, with buying mostly piling into chip stocks, Iwai Cosmo Securities chief strategist Kazuaki Shimada told TBS. The real test, he said, is how Japanese corporate guidance shakes out—major earnings start rolling in after the rally. That could determine if the move sticks. TBS NEWS DIG
Right now, the market is juggling two narratives. On one hand, AI demand is translating into actual orders, new plants, and some real supply snarls. On the other, investors are being asked to trust that a handful of firms can keep converting massive infrastructure outlays into earnings. Nvidia isn’t simply a chip name in Japan anymore—it stands in for the whole question of whether the AI surge will generate real cash flow or end up as just a pricey expansion spree.
