Alliance Bernstein Japan’s senior strategist Kei Takizawa says the firm is raising exposure to Japanese equities as AI‑linked companies climb the market‑cap ladder. For years Japan was labeled a low‑growth, value market, but memory‑chip maker Kioxia Holdings displaced Toyota as the nation’s largest company this month, while SoftBank briefly overtook the automaker. The shift reflects growing foreign appetite for Japan’s AI infrastructure players.

Investment houses such as Comgest and Pictet note that overseas pension funds are now targeting Japanese growth stocks, a rarity a decade ago. Forward‑looking price‑earnings multiples for the Topix “Core 30” have risen to roughly 17×, up from 14× ten years earlier, surpassing valuations in the UK and France. The re‑rating signals confidence but also raises volatility, as AI‑linked firms now account for over 40% of the Nikkei 225’s top‑ten weighting.

The emerging narrative positions Japan as an AI‑centric market rather than a manufacturing‑heavy arena, offering 50‑60 chip‑related firms versus the concentrated exposure in South Korea or Taiwan. Institutional investors who recognize this breadth could channel additional capital, widening Japan’s weighting in global AI portfolios. Nonetheless, the sector’s price swings mean any correction would hit a larger share of the index.