Kioxia Fell 13% and SoftBank Fell 7% as the Blue Wave Hit Tokyo
A single election result sent shockwaves through Tokyo, dragging memory chipmakers, AI investors, and fiber suppliers into a selloff that started in Texas and spread fast. The question now is whether the market is reacting to real policy or just…
Tokyo reopened on Wednesday, November 4, 2026, after a holiday and had its first chance to trade the U.S. election. By 1:50 a.m. GMT (10:50 a.m. JST), the Nikkei was down 3.1% at 61,127.9. At that point, 130 of its stocks were falling, and 95 were rising.
Democrats won both the House and the Senate. In Texas, Democrat Gina Hinojosa, who promised a moratorium on new data centers, defeated Gov. Greg Abbott.
At that same hour, memory chipmaker Kioxia (OTCMKTS:KXIAY) was down 10%, and it later fell more than 13%. SoftBank Group (OTCMKTS:SFTBY) was down about 7% and kept falling.
Investors feared Democratic gains could bring stricter rules for data center projects and slow spending on AI infrastructure. Takamasa Ikeda of GCI Asset Management summed up the morning: “Democrats are winning seats in some key states.”
What the Election Settled and What It Only Promised
The projected Democratic majorities in both houses are the firm part. Hinojosa’s moratorium is a campaign pledge, and no bill text, scope, or start date for it has been announced.
Federal limits face a higher bar. President Trump has threatened to veto bills from a Democratic Congress, and Wall Street strategists said: “a nationwide moratorium remains unlikely under any election outcome.”
Why Texas Policy Reaches Tokyo Suppliers
Every new data center needs memory, tested chips and fiber, so the selling reached suppliers as well as builders. At the 11:30 a.m. JST morning break, Kioxia was at ¥10,035, down 11.55%, for a market value of ¥16.03 trillion.
SoftBank, whose AI investments depend on that expansion, traded at ¥4,012, down 9.02%, for a market value of ¥22.86 trillion. Chip tester Advantest (OTCMKTS:ATEYY) fell 7.80% to ¥32,980.
Fiber makers Fujikura (OTCMKTS:FKURF) and Furukawa Electric fell 8.49% and 9.66%, to ¥3,569 and ¥2,489. One state’s pledge is small next to global demand from the largest cloud companies (often called hyperscalers), so these moves reflect a shift in sentiment more than any change in orders.
SoftBank’s U.S. ADR (a U.S.-traded receipt for its Japanese shares) closed Tuesday at $13.42, up 0.60%, before Tokyo reopened. That price will adjust once U.S. trading resumes.
Kioxia’s Slide Started Two Sessions Earlier
On November 2, Kioxia fell 15.78% to ¥11,345. Kioxia had guided December-quarter operating profit to ¥2 trillion, below analyst estimates and just above the September quarter’s ¥1.99 trillion. SoftBank fell 1.58% to ¥4,410 that day.
Kioxia blamed the timing of shipments. Its CFO, Yoshihiko Kawamura, said AI data center demand remains strong and planned output for next year is sold out.
In Seoul, the KOSPI opened up 2.43% at 5,786.13 and briefly rose above 5,800. By 11:20 a.m. KST, it was at 5,554.57, down 1.67%, with SK hynix off 3.22% and Samsung Electronics off 1.82%.
Taiwan’s Taiex fell about 2.3% to around 42,315 near noon, its lowest level since July 30, on its fifth straight loss.
What the Bull and Bear Cases Say About AI Stocks Now
The bull case is that demand still exceeds supply, as the sold-out comment suggests, and that the largest cloud companies’ budgets still stand after the veto threat and the state pledge. That expansion runs on more than chips, which is why we pulled together seven suppliers behind the data centers, from power to cooling to fiber, in a free report you can grab here.
The bear case is that the trade had become crowded, Kioxia’s guidance shows growth leveling off, and politics now adds a risk that investors were not pricing in on November 2.
My view is that the AI demand case remains intact after this drop, because the election raised headline risk without changing any announced order. Memory makers still carry their own boom-and-bust cycle risk, and the vote did nothing to remove it.
All Tokyo figures above are intraday, and the session ends at 3:30 p.m. JST (1:30 a.m. ET). If U.S.-traded AI suppliers hold firm after the 9:30 a.m. ET open on November 4, and Kioxia recovers to its ¥11,345 November 2 close within five sessions, the market will have treated the election result as noise. If a Texas bill appears with a start date for the moratorium, the bears were right.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
