Why did the BrainChip share price rocket 36% in July?

Rising rocket with dollar signs.Rising rocket with dollar signs.

The BrainChip Holdings Ltd (ASX: BRN) share price had a stellar run in July – its best month since February 2022.

Shares in the artificial intelligence (AI) technology company finished at $1.085, up 36% for the first month of FY23.

While BrainChip shares have since given up a portion of those gains, the company is currently trading at $1.02, down 0.49%.

What’s led BrainChip shares to accelerate last month?

The month of July was a volatile one for the BrainChip share price, to say the least.

Wild price swings of over 10% in either direction occurred several times despite a relatively quiet period for the company.

BrainChip’s only announcement in July was that of its quarterly activities report in which it provided a financial update.

On news of the release, its shares rose 8.62% followed by a 5-month high of $1.365 during the following day.

Nonetheless, it appears investors have mixed feelings when it comes to valuing the emerging AI company.

Hence why it’s likely its shares have moved excessively in the past month.

BrainChip’s market capitalisation is roughly $1.87 billion based on today’s price. This puts it in the likes with Dicker Data Ltd (ASX: DDR) although both companies are positioned differently in the tech space.

For context, the Australian distributor of hardware, software and cloud technology is valued approximately at $1.95 billion.

With BrainChip, a lot has been priced into its shares given that it generated $1.2 million in revenue for the prior quarter.

Management has been busy executing the commercialisation of its Akida neuromorphic IP.

Only time will tell if the company can deliver on its potential, especially given its lucrative partnership with world-renown, NASA.

BrainChip share price snapshot

Regardless of treading lower of late, the BrainChip share price has surged by 127% over the last 12 months.

When looking at year-to-date, its shares are up 50% for the period.

In comparison, the S&P/ASX All Technology index (ASX: XTX) is down 26% in 2022.

The post Why did the BrainChip share price rocket 36% in July? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has positions in Dicker Data Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data Limited. 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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