It’s another day in the green for the All Ordinaries Index (ASX: XAO). These three All Ords shares are helping to drive it higher, reaching their highest point in years.

The benchmark index is up 0.43% right now at 7,006 points.

So, which ASX All Ords shares are posting multi-year highs on Wednesday? Keep reading to find out.

3 ASX All Ords shares hitting multi-year highs

First off the rank is the share price of All Ords travel favourite Qantas Airways Limited (ASX: QAN).

It took off earlier today, gliding 3% to peak at $6.075. That’s the highest it’s soared since the COVID-19 pandemic took hold of Australia in March 2020.

It was just last week the iconic airline told the market it’s expecting to return to underlying pre-tax profit in the first half of financial year 2023, providing guidance of between $1.2 billion and $1.3 billion.

Joining the airline in posting a multi-year high on Wednesday is the far smaller All Ords share, New Energy Solar Ltd (ASX: NEW). It shot upward to reach 99 cents today – marking a 0.5% gain and its highest point since August 2020.

The US$244.5 million sale of the solar investment company’s US assets is set to finalise this month.

Shareholders were expecting to receive 82 cents per share as part of a capital return shortly after the sale finalises. Though, that’s dependent on exchange rates at the time of completion.

New Energy Solar investors can also expect another return worth between 13 cents and 16 cents per share on the winding up of the company, expected before the end of next year.

The final ASX All Ords share posting a multi-year high today is Dalrymple Bay Infrastructure Ltd (ASX: DBI). The stock hit a high of $2.58 this morning, marking a 4% gain and a new all-time high.

The coal terminal operator’s stock has gained 17% since it lifted its distribution guidance earlier this month.

The post 3 ASX All Ords shares smashing multi-year highs today appeared first on The Motley Fool Australia.

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More reading

• Qantas share price surges to post-COVID high
• It wasn’t all bad news for ASX All Ords shares on Monday. Here are some big winners
• Has the Qantas share price finally left COVID in its contrail?
• Top brokers name 3 ASX shares to buy next week
• Why Jumbo, Origin, Qantas, and Woodside shares are racing higher

Motley Fool contributor Brooke Cooper 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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Unlike its year-to-date performance, the Woodside Energy Group Ltd (ASX: WDS) share price has put on an underwhelming show so far this week.

Today, shares in the oil and gas producer are making their way lower again. As we head into the afternoon, Woodside is down 0.5% to $32.67 apiece, contrasting with the 0.56% gain in the S&P/ASX 200 Index (ASX: XJO).

As a result, the Woodside share price is now 3.9% behind its Friday closing price.

Oil prices go for a slip

When in the business of selling commodities, such as oil and gas, price is everything.

The difference between the cost for a company to extract it and the price it can sell it for determines the success of the operator. Hence, when the price of oil makes a move it tends to be reflected in the Woodside share price.

At the end of last week, the price per barrel of oil was hovering around US$85. Now, a barrel of crude is fetching US$83.77. All things considered, this is a relatively minor reduction in the commodity’s price. However, investors might be concerned about further price deterioration on the horizon.

Markets are dependent on supply and demand. In short, if supply increases prices go down — and if demand decreases prices go down. If we have both, then it’s a double whammy to the downside.

According to Reuters, the United States is looking to up its supply by releasing more oil from its strategic reserves. Simultaneously, there are growing concerns that demand from China — the world’s largest crude oil importer — could be in question.

Reportedly, China has indefinitely delayed the release of economic data for the People’s Republic. This action has commodity analysts presuming demand could be weakened by the country’s zero COVID-19 policy.

Still bullish on the Woodside share price

Allan Gray, a contrarian funds manager in Australia, shared their continued conviction in Woodside shares in its latest quarterly commentary.

According to the letter, the Allan Gray Australia Equity Fund maintains Woodside as its largest holding, at a 10% weighting. Although, the fund manager stated it has trimmed exposures in the energy sector to reallocate to other ideas.

The Woodside share price has been an exceptional performer in 2022, rising 43.8%.

The post Why is the Woodside share price having such a stinker this week? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• It’s a good day on the ASX 200. So why is the Woodside share price getting beaten up?
• Which ASX All Ords shares could perform well in a recession?
• 5 things to watch on the ASX 200 on Monday
• Top ASX dividend shares to buy in October 2022

Motley Fool contributor Mitchell Lawler 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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The Core Lithium Ltd (ASX: CXO) share price is flying high again on Wednesday.

In afternoon trade, the lithium miner’s shares are up 8% to $1.38.

This means the Core Lithium share price is now up 20% this week.

Why is the Core Lithium share price rocketing higher this week?

Investors have been scrambling to buy Core Lithium’s shares for a few reasons.

One is a rebound in higher risk assets this week following a huge improvement in investor sentiment globally.

Another reason is the ongoing strength in lithium prices. Earlier this week, Pilbara Minerals Ltd (ASX: PLS) reported yet another increase in the price commanded for a 5,000-tonne lithium shipment via its online auction.

This followed news that Chinese lithium prices hit a record high last week thanks to strong demand from the electric vehicle market.

This ties in nicely with the third reason the Core Lithium share price is booming this week.

What is the third reason?

On Monday, Core Lithium revealed that its managing director, Stephen Biggins, brought forward his resignation from the role and exited the company with immediate effect.

Mr Biggins had resigned in March and planned to step down from the role before the end of 2022. However, with the recent official opening of the Finniss Lithium Mine and appointment of Gareth Manderson as CEO, Biggins has decided it is the appropriate time to complete his role as managing director and as a director of Core Lithium.

Clearly it is full steam ahead for Core Lithium and its Finniss Lithium Mine at a time when lithium prices are at record highs. This bodes well for the company and could see bumper profits being generated in the coming quarters.

The post Why has the Core Lithium share price surged 20% so far this week? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Here are the top 10 ASX 200 shares today
• Why Baby Bunting, Brickworks, Core Lithium, and Dreadnought Resources are pushing higher
• Why are these ASX 200 lithium shares smashing it on Monday?
• Why is Core Lithium share price outperforming the ASX 200 today?

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 Scott Phillips.

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The Pilbara Minerals Ltd (ASX: PLS) share price has been among the best performers on the ASX 200 index on Wednesday.

In afternoon trade, the lithium miner’s shares are up 6% to $5.10.

Why is the Pilbara Minerals share price storming higher?

There appear to have been a couple of catalysts for the rise in the Pilbara Minerals share price today.

The first is a strong showing in the lithium industry following a positive night of trade for lithium miners on Wall Street.

This has seen fellow lithium shares Allkem Ltd (ASX: AKE) and Core Lithium Ltd (ASX: CXO) also push notably higher on Wednesday.

What else is boosting its shares?

Also giving the Pilbara Minerals share price a boost today has been a broker note out of Macquarie.

According to the note, the broker has retained its outperform rating and $5.70 price target on the company’s shares. This implies potential upside of almost 12% for investors from current levels.

The note reveals that Macquarie was pleased with the company’s latest lithium auction results, which revealed a winning (pre-auction) bid of US$7,100/dmt for 5,000dmt on a 5.5% lithia basis. This is the equivalent of US$7,830/dmt on a 6% lithia basis.

Macquarie is now expecting the ramp up of Pilbara Minerals’ Ngungaju project to allow more regular sales on the online battery material exchange platform.

The post Why is the Pilbara Minerals share price storming 6% higher on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Is it time for ‘cashing in some gains’ on Pilbara Minerals shares?
• 3 ASX 200 companies among the top 10 lithium producers in the world
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000
• Pilbara Minerals share price jumps on strong lithium auction results

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 Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Microsoft (NASDAQ: MSFT) has grown exponentially in its 47 years of business. Despite a recent market downturn, the company’s stock has grown over 200% in the last five years, thanks to the potency of brands such as Xbox, Windows, Azure, and Office. These brands’ success and market share will likely help the company continue growing for years to come.

However, Microsoft’s stock has fallen 29% since January, along with a long list of other tech stocks. Investors who haven’t been able to stay up to date on recent market trends might be perplexed as to why a dominant company like Microsoft has suffered such steep declines in 2022. Let’s find out. 

A beaten-down market

Microsoft has been among the many tech stocks hit by rising inflation and slowing consumer demand in 2022. Even though the company has suffered a 29% decline over the year in its share price, other companies have suffered more. For instance, PC component leaders AMD (NASDAQ: AMD) and Nvidia have seen their stocks fall about 60% in the same period. 

While consumer demand has fallen across various industries as the cost of living continues to rise, the PC market has been one of the hardest hit. According to Gartner, PC shipments fell 19.5% in the third quarter of 2022, with the overall market declining by 17.3%.

Most recently, on 7 October, Microsoft’s stock dipped 4.5% after AMD pre-announced plummeting PC sales for its September quarter. AMD projected revenue of $5.6 billion vs. analysts’ expectations of $6.7 billion, as its client chip sales were down 53% quarter over quarter. The sharp decline for AMD led Microsoft investors to doubt the Windows company’s PC-related business. 

Microsoft’s PC business is reported under its more personal computing segment, which made up 30% of revenue in the company’s fiscal year 2022, which ended 30 June. While Microsoft’s prominence in the PC market has triggered investor concern in 2022, its diversified revenue suggests the company will be better off than other companies in weathering market declines. 

Is Microsoft stock a buy?

In fiscal year 2022, Microsoft’s best-performing segments were its productivity and business processes segment (which include Office and LinkedIn) and intelligent cloud (revenue from Azure). The former made up 31.9% of Microsoft’s revenue in 2022 and saw a rise of 18% year over year, while the latter was responsible for 37.9% of revenue and rose 25%.

Even the company’s more personal computing segment isn’t a total black cloud on the overall business. In addition to Windows and PC revenue, it includes earnings from Microsoft’s Xbox consoles and services, which grew 16% throughout the year. The company may be most known for its influential role in the PC market, but its business has expanded to include far more lucrative markets over the years. 

The cloud market alone was worth $206.5 billion as of Q2 2022, with Microsoft’s Azure having the second biggest market share at 21%. According to Grand View Research, the market will grow at a rate of 15.7% from 2022 to 2030. Moreover, Microsoft’s segment growth of 25% since 2021 proves the lucrative prospects of its operations in this industry.

Additionally, Microsoft’s trailing free cash flow as of 30 June stood at $65.2 billion, matching Alphabet‘s result within a rounding error but trailing Apple‘s $107.6 billion. The Windows company will likely see some form of decline in the next year as fears of a recession grow. However, its varied businesses and free cash flow suggest the company is strong enough to overcome it. 

Microsoft’s decrease of 29% in its share price in 2022 makes it an absolute bargain, considering its long-term prospects. With the company’s substantial market share in promising industries and the funds to carry it through sustained market downturns, an investment in Microsoft is a no-brainer.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Microsoft stock is down 29% this year appeared first on The Motley Fool Australia.

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More reading

• Tough year for leading global growth fund laid bare with brutal fall in tech stocks
• Tech sell-off: These Nasdaq stocks could drop further, but one looks like a screaming buy
• 3 of the top-growing stocks on Earth
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• Why Warren Buffett loves this US stock

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Alphabet (A shares), Alphabet (C shares), Apple, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Apple, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Chalice Mining Ltd (ASX: CHN) share price is having a day to remember.

In afternoon trade, the mineral exploration company’s shares are up 10% to $4.38.

This makes the Chalice Mining share price the best performer on the ASX 200 today.

Why is the Chalice Mining share price racing higher?

Investors have been bidding the Chalice Mining share price higher today following the release of an update on exploration activities at the Julimar Nickel-Copper-Platinum Group Element (PGE) Project in Western Australia.

According to the release, exploration activities are continuing across the 30km-long Julimar Complex, with four diamond drill rigs currently working across the 10km-long Hartog-Baudin strike length and two rigs continuing resource definition drilling at the Gonneville PGE-Ni-Cu-Co-Au Deposit.

Positively, drilling to date supports the interpretation of the Gonneville intrusion (and Julimar mafic-ultramafic Complex) as having a rare chonolith-like geometry, which is similar to other major ultramafic-mafic orthomagmatic systems worldwide that host significant nickel-copper+/-PGE deposits. These include deposits such as Norilsk-Talnakh, Kabanga and Jinchuan.

Furthermore, Chalice recently made an important breakthrough in its exploration of the project, with the previously elusive northern extension of the Gonneville intrusion interpreted at depth in an effective 2D seismic survey. Previous drilling in this area had failed to intersect the prospective maficultramafic horizon, which drilling has now confirmed to be faulted ~650m to the west-north-west.

This essentially means that a new segment of the Julimar Complex can now be targeted with follow-up drilling, providing a substantial pathway for growth in the resource.

Strategic interest

Also potentially giving the Chalice Mining share price a lift today was news of strategic interest in the project from several large international trading houses, downstream battery, and auto manufacturers.

The release notes that interest in the large nickel sulphide endowment has increased significantly following the passing of the US Inflation Reduction Act (IRA) bill.

As a result, Chalice is currently considering securing a strategic minority joint venture partner (or partners) to assist in developing a potential mine at Gonneville.

The post Why is the Chalice Mining share price up 10% and the best performer on the ASX 200 today? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Yes, the ASX is open today, and here’s what’s happening
• Here are the top 10 ASX 200 shares today
• Why has the Chalice Mining share price crashed 40% in 4 months?

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 Scott Phillips.

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Like many growth-focused funds, it’s been a very tough 12 months for the Hyperion Global Growth Companies Fund (ASX: HYGG).

The fund consists of “a high-conviction portfolio of quality global listed equities from a research driven, bottom-up investment philosophy”. It’s looking for companies that have predictable earnings, low debt, sustainable competitive advantages, organic growth options and experienced and proven management teams. 

The September 2022 monthly update shows the fund has declined 31.8% over the past 12 months. The biggest detractors to performance were some of the largest and most popular global tech stocks.

Even for those of us who are somewhat numb to just how far these fallen heroes have tumbled, when the numbers are laid bare, you see just how brutal this market has been for a number of large-cap tech stocks.

Block (NYSE: SQ) – down 74%

Roku (NASDAQ: ROKU) – down 80%

Spotify (NYSE: SPOT) – down 57%

Meta Platforms (NASDAQ: META) – down 55%

How the mighty have fallen. 

Yet Hyperion are sticking to their guns, confident in what they believe will be a low-growth inflationary environment, that such an environment is best for their investing style.

Hyperion says that while short-term performance has been unpredictable, and acknowledging it has been a difficult period for investors, the fund believes it has allocated capital to businesses that will produce superior long-term results. 

The top five holdings at the end of September were all large-cap US tech stocks, namely Tesla (NASDAQ: TSLA), Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), ServiceNow (NYSE: NOW) and Airbnb (NASDAQ: ABNB). Combined, they made up over half the Hyperion Global Growth Companies Fund portfolio.

Hyperion went on to say its “global portfolio continues to produce strong short-term financial results which are consistent with the assumptions that underpin our long-term valuations,” saying it believes its portfolio “should perform relatively well in an economic downturn”.

The Hyperion Global Growth Companies Fund share price has fallen 31.7% over the past 12 months, in line with the underlying performance of the fund.

The post Tough year for leading global growth fund laid bare with brutal fall in tech stocks appeared first on The Motley Fool Australia.

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• Why Microsoft stock is down 29% this year
• Why Tesla stock was surging at the market open today
• Tesla and Netflix will make or break the Nasdaq this week
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• Buy Amazon stock for AWS, get the e-commerce business for ‘free’

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Bruce Jackson has positions in Amazon, Block, Inc., and Meta Platforms, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Airbnb, Inc., Amazon, Block, Inc., Meta Platforms, Inc., Microsoft, Roku, ServiceNow, Inc., Spotify Technology, and Tesla. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Airbnb, Inc., Amazon, Meta Platforms, Inc., and ServiceNow, Inc. 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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The Qantas Airways Limited (ASX: QAN) share price has breached the $6 mark for the first time since the pandemic hit in 2020.

In early morning trading, the ASX travel share is flying high, up 2.2% to $6.03.

The Qantas share price hit a new 52-week high of $6.075 shortly after the market open.

The share price gain comes despite no price-sensitive news being released by Qantas today.

Why is the Qantas share price up?

There’s been a buzz around Qantas following an update last week that sent its share price soaring 12%.

Qantas told the market it expects to report an FY23 half-year underlying profit before tax of $1.2 billion to $1.3 billion. According to The Australian, analysts expected this to be the company’s full-year result.

Qantas also expects net debt to drop to between $3.2 billion and $3.4 billion. This is big because it’s below the bottom of the target range of $3.9 billion.

These results are largely due to “strong” domestic travel demand and improving international demand.

Qantas said its revenue intakes for business purposes are above 100% of pre-COVID levels. Leisure intakes are above 130%.

The airline expects group domestic capacity to be 94% of pre-COVID levels in Q1 FY23 and 100% in Q2 FY23. Group international capacity is expected to be 61% in Q1 FY23 and 77% in Q2 FY23.

Before the COVID-19 market crash, Qantas hit an all-time high of $7.46 on 20 December 2019.

The Australian says the Bloomberg consensus 12-month target for the Qantas share price is $7.21.

What about other ASX travel shares?

Qantas shares are up 17% in the year to date.

The Air New Zealand Limited (ASX: AIZ) share price is up 2.2% today and down 23% in 2022.

The airline is vastly outperforming other ASX travel sector stocks.

The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 0.07% today and down 18% in 2022.

The Webjet Limited (ASX: WEB) share price is up 0.6% today and down 4.6% in 2022.

The post Qantas share price surges to post-COVID high appeared first on The Motley Fool Australia.

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More reading

• Has the Qantas share price finally left COVID in its contrail?
• Top brokers name 3 ASX shares to buy next week
• Why Jumbo, Origin, Qantas, and Woodside shares are racing higher
• Brokers name 3 ASX shares to buy today
• Is the Qantas share price fully valued following this week’s surge?

Motley Fool contributor Bronwyn Allen has positions in Flight Centre Travel Group Limited, Qantas Airways Limited, and Webjet 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 recommended Flight Centre Travel Group Limited and Webjet Ltd. 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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The Lithium Energy Ltd (ASX: LEL) share price has returned from its trading halt and stormed higher on Wednesday.

In morning trade, the lithium explorer’s shares are up 18% to $1.32.

At one stage, the Lithium Energy share price was up as much as 27% to $1.42.

Why is the Lithium Energy share price storming higher?

The catalyst for the rise in the Lithium Energy share price today has been the release of very positive drilling results.

In fact, the company believes the first hole of the maiden 10-hole drilling programme has confirmed a “major new lithium discovery” at the Solaroz Lithium Brine Project in the Lithium Triangle in Argentina. This project is in close proximity to one operated by lithium giant Allkem Ltd (ASX: AKE).

According to the release, significant levels of lithium brine concentrations in excess of 400 mg/l were hosted in the porous sandstones encountered between ~55 to ~228 metres depth in the first drillhole at the project.

Management advised that it is highly encouraged by these early assay results. It highlights that the significant lithium concentrations and low Mg/Li ratios are positive in relation to future potential processing options.

Drilling is now advancing in the first hole to test this primary target beneath a thick mudstone unit.

Significant resource potential

Lithium Energy’s executive chairman, William Johnson, commented:

To confirm the discovery of high concentrations of lithium in the brines in the upper aquifer of our first drill hole at Solaroz is a watershed moment for Lithium Energy. It further confirms the potential for the Solaroz Project to host a significant resource of lithium brines in what is probably the best location globally to have a lithium discovery.

With assay results showing that lithium concentrations in this first hole increase at depth, the Company is now looking forward to assay results from sampling the target lower aquifer, as drilling continues to its target depth of 400 metres.

The post Lithium Energy share price surges 27% on ‘major’ discovery appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Allkem Limited. 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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At a time when positive returns from technology shares have been few and far between, the BrainChip Holdings Ltd (ASX: BRN) share price has carried the tech torch honourably.

The artificial intelligence chipmaker posted an impressive 8.75% in the September-ending quarter. Similarly, the company’s share price is up a considerable 17.1% since the beginning of the year. Whereas, the S&P/ASX 200 Index (ASX: XJO) is 10.3% in the hole.

While the past performance of BrainChip shares is noteworthy, what matters most for shareholders now is: what happens next?

Could inflation dampen the BrainChip share price?

Where BrainChip goes in the short term is anyone’s guess, especially in terms of company-specific developments. However, we can make a general assessment of how macroeconomics could influence the valuation.

As per ANZ Research’s estimates (shown below), Australia’s cash rate could be heading for a peak above 3.5% at some stage next year. This would suggest a 1% or so increase made by the Reserve Bank of Australia in the near term.

We now expect the RBNZ to deliver 75bp hikes in November and February, compared with a more conservative RBA policy path. The result is a much wider policy differential going forward in 2023. @mahjabeen_zaman @macroJB pic.twitter.com/chharn2av1

— ANZ_Research (@ANZ_Research) October 18, 2022

https://platform.twitter.com/widgets.js

Now, this might be a concern for a company strapped with a lot of debt. Higher interest rates ultimately would mean increased interest expenses. However, BrainChip is fortunate to not hold a cent of debt on its balance sheet as of 30 June 2022.

In fact, BrainChip holds approximately US$28.43 million in cash and equivalents denominated in a strengthening currency. This would suggest that any further interest rates could result in higher interest income, assuming the company maintains its lack of debt.

Conversely, higher interest rates would also imply persisting inflation. This could weigh on the BrainChip share price as payments to suppliers and employees make up the bulk of the company’s operational expenses.

For the latest half-year, BrainChip paid out US$9.4 million to employees and suppliers. If this figure were to increase due to inflationary pressures, it could deepen the losses on the company’s bottom line.

What about recent activity?

As we chart a course for the last quarter of the 2022 calendar year, short-sellers are counting on the BrainChip share price to fall.

Recently reported by my colleague James, short interest has reached 6.66% in the chipmaker. While this isn’t enough to place the company in the top 10 most shorted ASX shares, it is notable.

For those shorting BrainChip, the narrative might be based on the company’s unprofitable nature. Despite holding a stack of cash, at the current rate, BrainChip only has roughly one year and five months’ worth of runway left until it would need to either take on debt or raise capital.

If we’re still in a cold market at that time, the company might find it difficult to raise capital. At the same time, debt costs could be much higher due to increased interest rates.

Either way, it will be an interesting 12 to 18 months ahead for the BrainChip share price.

The post Can the BrainChip share price continue its growth run this quarter? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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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