How did the BrainChip share price manage to smash the ASX 200 in Q1?

The technology company saw its stocks outperform its index peers last quarter. How did it do that?

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Key points
  • The BrainChip share price gained almost 9% in the first quarter of the financial year
  • In contrast, the ASX 200 fell 1.4% over the same period
  • The computer chip maker has been a shining light in a tough year for technology stocks

Artificial intelligence chipmaker BrainChip Holdings Ltd (ASX: BRN) saw its share price rocket upwards last quarter.

As a comparison, its 8.75% rise spanked the S&P/ASX 200 Index (ASX: XJO), which fell 1.4%.

The benchmark index would have presumably done worse if BrainChip wasn't a constituent!

Let's take a look back at the three months ending September to see what excited investors about the computer chip maker.

A man in a business suit wearing boxing gloves strikes a boxing pose with glove thrust forward atop a computer screen.

Image source: Getty Images

Riding the wave of market sentiment

BrainChip started the quarter on a high after it was admitted to the ASX 200 in late June.

After that, the major event to influence the market was its annual financial results, announced in August.

Revenue was spectacularly up 529% year-over-year to US$4.83 million. However, operating loss held steady at US$8.56 million.

The BrainChip share price spiked on the day, although it gave back those gains in the days following.

Other than that, there were no official announcements to the ASX that could have impacted the stock price.

It seems movements in the BrainChip share price over the quarter were largely macroeconomics-driven.

Growth and technology shares generally headed upwards between the end of June to mid-August, but had given back some of those gains by September.

The S&P/ASX All Technology Index (ASX: XTX), to demonstrate, enjoyed a 21% rally from the start of the quarter to 15 August. BrainChip shares soared 39% over the same period.

One of the few tech winners in 2022

In a year when most technology stocks have struggled, BrainChip has been a shining light. 

Its shares have gained 128% over the past 12 months as it tries to transition from the pre-revenue stage to the commercialisation of its AI chips.

Over the past year, BrainChip has impressed the market with new deals with the likes of space agency NASA and car maker Mercedes Benz Group AG (FRA: DAII).

Motley Fool contributor Tony Yoo has positions in 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 Scott Phillips.

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