Up 69% in 6 months, why is the Brainchip share price crashing 6% today?

ASX AI stock Brainchip is falling hard on Monday.

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The Brainchip Holdings Ltd (ASX: BRN) share price is taking a beating on Monday.

Shares in the All Ordinaries Index (ASX: XAO) artificial intelligence (AI) chip maker closed Friday trading for 30.5 cents. In morning trade today, shares are swapping hands for 28.7 cents apiece, down 5.9%.

For some context, the All Ords is up 0.7% at this same time.

Here's what's happening.

Why is the ASX AI stock under selling pressure?

The Brainchip share price is under pressure following the release of the company's quarterly update for the three months ending 31 March.

Investors are hitting the sell button with cash outflows ramping up even as inflows crimp.

Over the three months, Brainchip reported net operating cash outflows of US$4.4 million, up from US$3.3 million last quarter.

Meanwhile, cash inflows from customers came in at a rather paltry US$90,000, down from $780,000 the prior quarter.

Also potentially pressuring the Brainchip share price today was the increase in total payments to suppliers and employees, which came out to US$4.9 million compared to US$4.2 million last quarter.

The company said this increase was driven by the payment of 2023 bonuses to employees, increased third-party marketing & sales services and the renewal of corporate insurance policies, among other cost increases.

Management noted that cash inflows from financing activities included US$2.5 million received upon the completion of its capital call notice, issued to LDA Capital in December, which resulted in the sale of 23.7 million Brainchip shares.

During the quarter, the company also received US$540,000 from the exercise of Long-Term Incentive Plan ("LTIP") stock options by participants.

Looking back on the results from the first three months of 2024 that are failing to lift the Brainchip share price today, CEO Sean Hehir said it was "a quarter of significant transformation and growth for the company".

Among the highlights, Hehir said:

In January, the company participated in, and presented at, the Consumer Electronic Show 2024 [CES 2024] in Las Vegas, the world's largest showcase for consumer electronic products. This was the first year that Brainchip had a major presence at the CES show.

In a major accomplishment for the company, in March its Akida technology was launched into low-earth orbit aboard the Optimus-1 spacecraft built by the Space Machines Company.

"The successful launch is another milestone for Brainchip's innovative AI acceleration solution in the burgeoning SpaceTech industry, which needs advanced learning and decision-making processes in challenging space conditions," Hehir said.

Brainchip share price snapshot

The Brainchip share price has seen some huge moves over the past year, both higher and lower.

Despite today's fall, shares in the ASX AI tech stock remain up 69% over six months. Shares are down 28% since this time last year.

Motley Fool contributor Bernd Struben 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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