Hitachi stock has fallen 20% from its February peak as investor confidence in its 'Physical AI' infrastructure strategy weakens despite management efforts to address concerns.

What happened: Hitachi's share price dropped to 4,657 yen on June 12, down roughly 20% from its February high. The decline began in late April when the company issued earnings guidance for the fiscal year ending March 2027 that fell short of market expectations. On June 10, Hitachi held an investor briefing to address lingering concerns about its Physical AI strategy—the deployment of artificial intelligence in social infrastructure—but market anxiety persists.

Why it matters: Investors had built up growth expectations around Hitachi's Physical AI initiative, but those hopes appear to be cooling. The gap between the company's guidance and what the market had anticipated suggests either slower adoption of the strategy or execution challenges, causing shareholders to reassess the stock's value.

What to watch: The June 10 investor briefing was Hitachi's attempt to restore confidence in its Physical AI revenue outlook. Whether the stock stabilizes or continues to decline will signal whether management's explanation has addressed the market's doubts about the business model's near-term delivery.