Why did the BrainChip share price leap 7% today?

Shares in the AI company could have lifted higher on improving investor sentiment.

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Key points
  • The BrainChip share price outperformed its tech sector peers on Wednesday, gaining almost 7%
  • Last weekend the company announced the appointment of a new chief marketing officer
  • More broadly, there are signs tech investors are more confident with market conditions due to falling US inflation indicators

The Brainchip Holdings Ltd (ASX: BRN) share price defied the tech sector sell-off on Wednesday, closing 6.92% higher.

Shares in the ASX artificial intelligence (AI) company closed at 69.5 cents each, closing just shy of their intraday high of 70 cents apiece.

Technology was by far the ASX's worst-performing sector today. This was reflected in the S&P/ASX 200 Information Technology Index (ASX: XIJ) shrinking by 1.05%. To put the loss into the perspective, the next-ranked laggard was the S&P/ASX 200 Real Estate Index (ASX: XRE) which lost 0.34%.

All other sectors were in the green today while the S&P/ASX 200 Index (ASX: XJO) enjoyed a 0.7% boost.

So why did BrainChip's shares do so well while some of the company's tech peers struggled to keep their heads above water? Let's investigate.

a man wearing spectacles has a satisfied look on his face as he appears within a graphic image of graphs, computer code and technology related symbols while he concentrates on a computer screen

Image source: Getty Images

What's going on with the BrainChip share price?

There's no news today from BrainChip to make sense of why its shares might have done so well on Wednesday.

However, the company's rally kicked off yesterday when its share price closed 4% higher from its open of 62 cents. It seems the momentum that was building then was fully unleashed today.

Also, one important development unfolded for the company last weekend that may have been reflected in the Brainchip share price on Monday.

BrainChip appoints chief marketing officer

BrainChip announced that it had appointed ex-Amazon hire Nandan Nayampally as its chief marketing officer. Nayampally was said to have a track record in developing intellectual property and helped encourage vendors to use the Alexa Voice assistant while at Amazon.

It seems investors apparently didn't think much of this announcement at the time as when the Fool reported the news, BrainChip shares were down more than 2% for the day.

Is Tech share investor sentiment returning?

However, things turned a corner on Tuesday. This could be, in part, due to improving sentiment in the US that the Fed has inflation problems under control.

Tech shares like BrainChip blasted off earlier this month when it was announced CPI data came in below forecasts, and the Nasdaq Composite (NASDAQ: .IXIC) had its best one-day gain since March 2020 after the news was announced.

The Nasdaq Composite also gained 1.04% in its most recent trading session too, so confidence could be returning to tech companies like BrainChip to help give certain shares a lift.

Motley Fool contributor Matthew Farley 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 Scott Phillips.

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