Japanese Tech Stocks Drag Nikkei to 3-Week Low Amid Nvidia, Advantest Slumps

The Nikkei share average dropped 2% to a three-week low due to tech sector stocks, with Advantest plunging 9.1% and SoftBank Group dropping 6.3%. The declines were attributed to a Wall Street sell-off and Nvidia's disappointing earnings, as well as a report that China's Alibaba had developed a new chip to compete with Nvidia's offerings. The broader Topix declined 0.8%.

The Nikkei share average slumped to a three-week low on Monday, as tech sector stocks, particularly those in the chip sector, led the decline. The Nikkei NI225 dropped more than 2% to 41,849.82, as of the midday trading recess, and earlier dipped to 41,843.96 for the first time since August 8 [1].

The sell-off was driven by a combination of factors, including a Wall Street-led technology sector sell-off on Friday and Nvidia's disappointing earnings. The broader Topix TOPIX declined a more muted 0.8%. More than half of the Nikkei's 869-point slide was accounted for by drops in two heavyweight stocks: Advantest 6857 plunged 9.1%, or 280 points, while artificial intelligence-focused start-up investor SoftBank Group 9984 dropped 6.3%, or 202 points [1].

The broader tech sector's decline was exacerbated by a Wall Street Journal report that China's Alibaba had developed a new AI chip to compete with Nvidia's offerings. Alibaba surged as much as 18.8% on Monday in Hong Kong [2]. Nvidia's shares were also weighed down by a Wall Street Journal report that China's Alibaba had developed a new chip to compete with Nvidia's offerings. Alibaba surged as much as 18.8% on Monday in Hong Kong [2].

The U.S. markets are closed on Monday for the Labor Day holiday. Other chip shares leading the Nikkei lower in the latest session included Disco 6146, off 8.5%, Socionext 6526, down 7.1%, and Furukawa Electric 5801, down 6.7% [1].

Yunosuke Ikeda, head of macro research at Nomura, attributed the Nikkei's drop to an exaggerated reaction to Friday's New York market, which was primarily a rebalancing of portfolios at month-end by selling all the stocks that outperformed in August [1].

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3UO02A:0-japan-tech-shares-drag-nikkei-to-3-week-low-as-advantest-dives-9/
[2] https://www.ainvest.com/news/alibaba-creates-ai-chip-nvidia-absence-china-2508-15/