Brainchip Holdings Ltd (ASX: BRN) shares have emerged from a trading pause and are shooting higher on Tuesday.
In morning trade, the artificial intelligence technology company’s shares are up 10% to a record high of $1.13.
This means that BrainChip’s shares are now up 66% since closing at 68 cents on New Year’s Eve.
Why have BrainChip shares become such hot property?
Investors have been bidding BrainChip shares higher in response to a number of positive developments.
In fact, the rise was so strong it led to the company receiving a speeding ticket on Monday. The ASX Ltd (ASX: ASX) sent the company a price query, highlighting the “change in the price of BRN’s securities from a close of $0.885 on 6 January 2022 to a high of $1.035 today.”
This morning BrainChip’s shares were briefly paused while it responded to the query.
What was the response?
BrainChip advised that there was no information concerning it that has not been announced to the market which, if known by some in the market, could explain the rise in its share price.
However, it did provide an explanation for why it believes investors may have been buying shares.
The company notes that last week it appointed a new non-executive director and then on Monday it issued a press release which revealed that Information Systems Laboratories is using BrainChip technology in an artificial Intelligence-based radar research project for the Air Force Research Laboratory. Though, it believes the latter is immaterial in nature at this stage and there are no ongoing commercial arrangements in place.
Finally, it highlighted that there has been an increase in editorial tech media coverage regarding the artificial intelligence market in various segments where it operates. It notes that this coverage has grown since the completion of its chip, which management feels “could be a factor regarding increasing market confidence in our technology.”
The coverage above includes, as we highlighted here last week, Mercedes using BrainChip’s Akida chip in its Vision EQXX concept car. The chip is being used in the electric car to power the car giant’s “Hey Mercedes” smart assistant feature.
All in all, this could make BrainChip shares one to watch in 2022. Though, with a market capitalisation approaching $2 billion, expectations are sky high.
The post Why have BrainChip (ASX:BRN) shares become such hot property? appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro 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 Bruce Jackson.
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