BrainChip (ASX: BRN) share price rockets 16% on Megachips deal

a man looks down at his phone with a look of happy surprise on his face as though he is thrilled with good news.

Shares for technology company BrainChip Holdings Ltd (ASX: BRN) have rocketed up almost 16% on Monday. 

The stock was going for 62.5 cents mid-afternoon, which was 15.74% higher than Friday’s closing price of 54 cents.

The likely trigger for the investor fervour was this morning’s announcement that US$111 billion Japanese firm MegaChips Corporation (TYO: 6875) has partnered with BrainChip.

“The 4-year agreement provides MegaChips with an intellectual property license for use in designing and manufacturing BrainChip’s Akida technology into external customers’ system-on-chip designs,” BrainChip announced to the ASX.

“In exchange for the IP and certain engineering services, BrainChip will receive an upfront license fee and additional payments over the term of the agreement.”

‘Exciting collaboration’

BrainChip, a Californian business, develops chips and software that it claims learn autonomously, like the human brain.

According to BrainChip sales and marketing vice president Rob Telson, adding BrainChip’s Akida technology onto MegaChips’ creations would “deliver a cascading array of benefits to cutting-edge products”.

“That not only [ensures] power efficiency without compromising outcomes but can run autonomously for incremental learning without the need to go back and forth to the cloud,” he said.

“This is an exciting collaboration from both a business perspective as well as from an industry-altering aspect.”

BrainChip shares on a tear recently

Shares for BrainChip have gone gangbusters the last few weeks.

The stock closed 6 October at 37 cents but in the month-and-a-half since then, it has risen by almost 69%.

A series of announcements regarding product development milestones, patents and new orders have spurred on the shares.

In fact, last month, the ASX sent the machine learning developer a “speeding ticket” enquiry after seeing the stock burst upwards.

The company posted a reply that “a reasonable person” would not expect its patent announcements to materially impact the share price, even though they did.

The post BrainChip (ASX: BRN) share price rockets 16% on Megachips deal appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns shares of 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 Bruce Jackson.

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