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Markets

Japanese AI startup hits $1bn market cap on revenue of $3m

Analysts warn of 'bubble' in red-hot tech sector

Neural Pocket uses its proprietary AI algorithm to analyze videos and images. (Source photo by Kyodo) 

TOKYO -- A Japanese artificial intelligence startup that had its IPO last week has exceeded $1 billion in market capitalization, even though it has yet to build a solid earnings track record, in a sign that shows an overheating stock market.

On Wednesday, Tokyo-based Neural Pocket surged 21% to its daily limit of 8,600 yen. Its share price continued to rise in late afternoon proprietary trading, hitting a high of 10,900 yen.

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