BrainChip (ASX: BRN) share price rockets 16% on Megachips deal

The Californian machine learning developer signs a partnership with a massive Japanese technology company.

| More on:
a man looks down at his phone with a look of happy surprise on his face as though he is thrilled with good news.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares for technology company BrainChip Holdings Ltd (ASX: BRN) have rocketed up almost 16% on Monday. 

The stock was going for 62.5 cents mid-afternoon, which was 15.74% higher than Friday’s closing price of 54 cents.

The likely trigger for the investor fervour was this morning’s announcement that US$111 billion Japanese firm MegaChips Corporation (TYO: 6875) has partnered with BrainChip.

“The 4-year agreement provides MegaChips with an intellectual property license for use in designing and manufacturing BrainChip’s Akida technology into external customers’ system-on-chip designs,” BrainChip announced to the ASX.

“In exchange for the IP and certain engineering services, BrainChip will receive an upfront license fee and additional payments over the term of the agreement.”

‘Exciting collaboration’

BrainChip, a Californian business, develops chips and software that it claims learn autonomously, like the human brain.

According to BrainChip sales and marketing vice president Rob Telson, adding BrainChip’s Akida technology onto MegaChips’ creations would “deliver a cascading array of benefits to cutting-edge products”.

“That not only [ensures] power efficiency without compromising outcomes but can run autonomously for incremental learning without the need to go back and forth to the cloud,” he said.

“This is an exciting collaboration from both a business perspective as well as from an industry-altering aspect.”

BrainChip shares on a tear recently

Shares for BrainChip have gone gangbusters the last few weeks.

The stock closed 6 October at 37 cents but in the month-and-a-half since then, it has risen by almost 69%.

A series of announcements regarding product development milestones, patents and new orders have spurred on the shares.

In fact, last month, the ASX sent the machine learning developer a “speeding ticket” enquiry after seeing the stock burst upwards.

The company posted a reply that “a reasonable person” would not expect its patent announcements to materially impact the share price, even though they did.

Motley Fool contributor Tony Yoo owns shares of Brainchip Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

A group of miners in hard hats sitting in a mine chatting on a break as ASX coal shares perform well today
Energy Shares

Why are ASX 200 coal shares having another cracker of a day?

Why are coal shares performing so well today?

Read more »

Group of thoughtful business people with eyeglasses reading documents in the office.
Financial Shares

Up 12% in a month, is the AMP share price finally on the comeback trail?

AMP shares are making gains but remain under pressure.

Read more »

A boy is about to rocket from a copper-coloured field of hay into the sky.
Resources Shares

Guess which ASX copper share has exploded 182% this week?

This ASX copper share has risen 182% since last week alone...

Read more »

Woman using laptop sitting in cloud cheering
Mergers & Acquisitions

Why is the PTB share price rocketing 35%?

The company's shares are flying today with a takeover offer on the table

Read more »

Rising marijuana share price.
Share Gainers

Up 35% in a month, is the Incannex share price on the comeback trail?

The cannabis player continues to post tidy gains on the chart.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why CSL, IPH, Renascor, and Treasury Wine shares are pushing higher

These ASX shares are having strong days. Here's why...

Read more »

Three children wearing athletic short and singlets stand side by side on a running track wearing medals around their necks and standing with their hands on their hips.
Share Gainers

3 tiny ASX mining shares leaping over 20% on project announcements

Why are these shares soaring today?

Read more »

a small boy dressed in a superhero outfit soars into the sky with a graphic backdrop of a cityscape.
Resources Shares

Guess which ASX lithium share just rocketed 20%

The Aussie-based lithium explorer is now the largest holder of lithium mining claims in the US state of South Dakota.

Read more »