The S&P/ASX 200 Index (ASX: XJO) finished 3.75% in the green today, but the Brainchip Holdings Ltd (ASX: BRN) share price lifted even higher.
The artificial intelligence company's share price rose 5.33% today to finish at 89 cents.
Let's take a look at why Brainchip shares had such a good day.
Tech shares rise
The Brainchip share price was not the only ASX tech share to finish the day on a high today. The Megaport Ltd (ASX: MP1) share price jumped 6.05%, while Appen Ltd (ASX: APX) rose 2.37% and Life360 Inc soared 8.19%. The S&P/All Technology Index (ASX: XTX) surged 4.84%.
Australian tech shares followed a similar trend to their counterparts in the USA. The technology heavy NASDAQ Composite Index (NASDAQ: .IXIC) rose 2.27% overnight.
Hope that the US Federal Reserve may not raise interest rates as much as expected helped drive market gains in America on Monday.
CFRA chief investment strategist, in quotes cited by CNBC, said:
Because the S&P was down more than 9% in September… because the ISM was weaker than expected – ditto for construction spending – people are now surmising – Hey, maybe the Fed won't be as aggressive.
Technology shares are especially vulnerable to interest rate rises given their valuations are largely based on future growth prospects.
Meanwhile, the Reserve Bank of Australia (RBA) lifted interest rates by less than expected today.
The RBA raised the cash rate by 25 basis points to 2.6%. But, economists had predicted a 50 basis point rise. However, the RBA warned further rate hikes will be needed in the future to bring down inflation. Governor Philip Lowe said:
The board expects to increase interest rates further over the period ahead. It is closely monitoring the global economy, household spending and wage and price-setting behaviour.
Brainchip was added to the ASX 200 in June this year. Brainchip reported a 1% drop in operating loss to US$8.56 million in the half year ended 30 June. Revenue soared 529% year over year to US$4.83 million. Brainchip did not pay a dividend.
Brainchip share price snapshot
The Brainchip share price has risen nearly 30% in the year to date, while it has soared 128% in the past year.
For perspective, the ASX 200 has fallen nearly 8% in the past year.
Brainchip has a market capitalisation of more than $1.5 billion based on the current share price.
