Why have BrainChip (ASX:BRN) shares become such hot property?

BrainChip shares have been on fire in 2022…

| More on:
Concept image of man holding flames in both hands.

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

Brainchip Holdings Ltd (ASX: BRN) shares have emerged from a trading pause and are shooting higher on Tuesday.

In morning trade, the artificial intelligence technology company’s shares are up 10% to a record high of $1.13.

This means that BrainChip’s shares are now up 66% since closing at 68 cents on New Year’s Eve.

Why have BrainChip shares become such hot property?

Investors have been bidding BrainChip shares higher in response to a number of positive developments.

In fact, the rise was so strong it led to the company receiving a speeding ticket on Monday. The ASX Ltd (ASX: ASX) sent the company a price query, highlighting the “change in the price of BRN’s securities from a close of $0.885 on 6 January 2022 to a high of $1.035 today.”

This morning BrainChip’s shares were briefly paused while it responded to the query.

What was the response?

BrainChip advised that there was no information concerning it that has not been announced to the market which, if known by some in the market, could explain the rise in its share price.

However, it did provide an explanation for why it believes investors may have been buying shares.

The company notes that last week it appointed a new non-executive director and then on Monday it issued a press release which revealed that Information Systems Laboratories is using BrainChip technology in an artificial Intelligence-based radar research project for the Air Force Research Laboratory. Though, it believes the latter is immaterial in nature at this stage and there are no ongoing commercial arrangements in place.

Finally, it highlighted that there has been an increase in editorial tech media coverage regarding the artificial intelligence market in various segments where it operates. It notes that this coverage has grown since the completion of its chip, which management feels “could be a factor regarding increasing market confidence in our technology.”

The coverage above includes, as we highlighted here last week, Mercedes using BrainChip’s Akida chip in its Vision EQXX concept car. The chip is being used in the electric car to power the car giant’s “Hey Mercedes” smart assistant feature.

All in all, this could make BrainChip shares one to watch in 2022. Though, with a market capitalisation approaching $2 billion, expectations are sky high.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 Technology Shares

Young female investor holding cash ASX retail capital return
How to invest

Why I think these two ASX shares could turn $5,000 into $100,000

Here are two ASX shares that I believe could generate big returns for investors.

Read more »

Person pointing finger on on an increasing graph which represents a rising share price.
Technology Shares

Why is the BrainChip share price gaining 5% on Friday?

Why are BrainChip shares on fire this Friday?

Read more »

A girl runs along with her kite flying high in the sky.
Technology Shares

This small-cap ASX share is soaring 33% on strategic partnership news

LiveHire shares are set to finish Friday on a high note.

Read more »

Businessman in suit and holding a briefcase jumps into the sky celebrating the rising Enero share price
Technology Shares

Why is the Kogan share price jumping 12%?

Kogan's shares are ending the week strongly...

Read more »

a man and a woman sitting in a technology related work environment high five each other while the man wears headphones around his heck and the woman sits in front of a laptop.
Technology Shares

Why ASX 200 tech shares are outperforming the market on Friday

Tech shares on fire today and leading the broader market. Here are the details.

Read more »

a man sits at his desk wearing a business shirt and tie and has a hearty laugh at something on his mobile phone.
Technology Shares

What’s boosting the Damstra share price today?

The company has signed a three-year deal with a copper miner. Here are the details.

Read more »

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Technology Shares

Block share price jumps 9% following Cathie Wood investment

Block's shares are jumping on Friday. Here's why...

Read more »

A man leaps from a stack of gold coins to the next, each one higher than the last.
Technology Shares

Why is the Xero share price leaping higher today?

Xero shares are shooting the moon today. What's gotten investors so excited?

Read more »