AI-driven chip demand seen lifting Japan Inc. to record profits for a sixth straight year in fiscal 2026
Japanese broker forecasts point to a sixth consecutive year of record profits in FY2026, led by AI-driven semiconductor and equipment demand (notably NAND and data-center supply chains). Easing Middle East risk has helped oil retrace toward pre-crisis levels, reducing input-cost pressure and supporting broader earnings revisions, including autos and transport. The narrative reinforces Japan equity upside sensitivity to AI capex and lower energy volatility.
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Several Japanese securities firms expect overall profits for Japanese stocks to hit a sixth consecutive record in fiscal 2026, led by an AI-fueled boom in semiconductors. Kioxia has forecast fiscal first-quarter net profit through June of 869 billion yen, up more than 47-fold from a year earlier, citing strong NAND flash demand from AI data centers. Brokers also singled out chip equipment makers including Advantest and Tokyo Electron as beneficiaries. Easing Middle East geopolitical risks and a pullback in oil prices have also helped repair earnings expectations for shipping and auto-related companies.