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BrainChip volatility continues in 2021

It has been a rollercoaster start to the year for technology favourite Brainchip, with the company's share price surging in early January, only to dip following underwhelming quarterly and annual reports. However, in the last week, the artificial intelligence hopeful has surged, taking it back to 3-month highs.


Just before Christmas, BrainChip investors were excited by the signing of an intellectual property licensing agreement with major semiconductor manufacturer Renesas Electronics America for use of the company's Akida neural processor. The Akida neural processor is a system-on-chip solution designed for the emerging AI market.


Former BrainChip CEO Lou DiNardo called the Renesas agreement “a market validation of our technology.”


At the same time, BrainChip also received an order from NASA for an Akida Early Access Evaluation Kit. The U.S. National Aeronautics and Space Administration will use to kit to evaluate the processor for use in its spaceflight operations.


Following the company's quarterly update at the end of January and subsequent FY20 annual reports release, interest has waned. Shares retreated after the company revealed that despite positive commercial progress, it had been a costly period for the tech developer, accumulated a net loss after income tax of US$26.8 million, more than double the US$11.3 million loss it incurred in 2019.


However, in the last week, the company was caught up in the S&P Dow Jones quarterly rebalance of the S&P/ASX Indices and was admitted to both the ASX All Ordinaries and ASX 300 Indices. Despite a subsequent leadership announcement putting a brief dent in momentum, the news has sparked a flurry of interest sending the shares over 40% higher for the week.


On Tuesday, the BrainChip board mutually decided to terminate the managing director and CEO, Louis DiNardo, from his post. While no reason was stated for the abrupt exit, the decision was made with immediate effect, initially concerning shareholders. Although with shares closing at 61 cents up, the fears appear to be short-lived.