Softbank’s Stock Rally Triggers Overbought Warnings Amid Broader Market Optimism

SoftBank Group Corp.'s shares have surged more than 135% in four months, pushing its 14-day Relative Strength Index to 90—a level historically signaling overbought conditions. Similar RSI peaks in February and July 2024 preceded sharp pullbacks, raising concerns among investors.

The stock now trades further above analyst price targets than at any point since 2010, a pattern that typically foreshadows corrections. "It's overheated in the short term," admits Angus Lee of Sparx Asset Management, who recently took profits despite maintaining long-term Optimism about potential IPOs in SoftBank's portfolio.

Phillip Securities' Kazuhiro Sasaki notes the rally extends beyond fundamentals, fueled partly by investors diversifying exposure to record-high Nikkei 225 components. While the discount to net asset value has narrowed from 48% to 30% since July, valuation concerns persist.

The conglomerate's planned $2 billion investment in Intel adds another LAYER to its complex narrative—a story of aggressive positioning in both public markets and private tech ventures.