Japan Stock Market Today: Nikkei Declines As Semiconductor Sell-Off Meets UBS Forecast Of USD 1 Trillion In AI Infrastructure Spending

Japan’s Nikkei 225 fell 0.8% to 64,128.54 on Thursday, 22 October 2026, after semiconductor stocks pulled back from the previous session’s gains. Investors are looking beyond the latest earnings reports and questioning whether the rush to build AI infrastructure will continue at the same pace in 2027. The broader Topix index was little changed after gaining 0.9% the day earlier.

Tokyo Electron lost 4.1%, while Screen Holdings fell 6% and Lasertec dropped 2.7%. Fujikura, a supplier of data-centre cables, declined 3%. SoftBank Group, which invests in AI-focused startups, was down 3.1%. The losses came even as several other technology stocks traded higher, highlighting the mixed performance of Japan Nikkei 225 constituents.

What Is Weighing On Semiconductor Stocks?

Results from US chip equipment maker Lam Research offered little comfort to investors. Although the company reported broadly solid earnings, its shares fell in extended trading as concerns about Chinese demand persisted. These concerns also weighed on semiconductor stocks in Japan.

Analysts say that Chinese customers may have brought forward equipment purchases before possible regulatory restrictions tighten. If that is the case, orders could weaken after the initial rush.

There was also some selling after Wednesday’s gains. Japanese stocks had become vulnerable to profit-taking following strong after-market earnings reports from SpaceX and Super Micro Computer on Tuesday.

The bigger question is whether companies will keep spending heavily on AI computing capacity next year.

AI Infrastructure Spending Could Cross USD 1 Trillion

A UBS report puts AI-related capital expenditure by major technology companies at more than USD 600 billion in 2026. Their combined AI infrastructure spending in 2027 could exceed USD 1 trillion as demand for computing power rises.

But the spending boom comes with costs. UBS flagged weaker cash flows at major technology companies and less robust demand for their bond issuances. Investors are counting on AI services generating enough revenue to bring free cash flow back into positive territory in 2028.

The economic benefits are also still taking shape. UBS estimates that AI infrastructure spending added around 0.75 percentage points to US GDP growth in the first half of 2026, but found little clear evidence of a material increase in overall productivity.

Some Japanese technology stocks bucked the trend. Trend Micro rose 6.6%, SHIFT gained 9%, BayCurrent advanced 5.9%, and Sony climbed 2.6%.

For investors, the split in performance points to a more pressing question: can the money flowing into AI infrastructure deliver returns that justify the cost?

Also Read - Bharat Electronics Shares Plunge Around 2% Despite ₹770 Crore Radar Deal And ₹1,011 Crore In Additional Orders