If you’re on the lookout for blue chip ASX shares that you can buy and hold, then I would suggest you check out the ones listed below.

These quality companies could have the potential to grow strongly over the next decade, which could lead to their shares generating market-beating returns for investors during the 2020s. Here’s why they have been rated as buys:

REA Group Limited (ASX: REA)

The first ASX blue chip share that could be a great buy and hold option is property listings company REA Group.

The last few years have not been easy for the company. It has had to deal with a mini housing market crash and then of course the pandemic. But despite this, REA Group has managed to come out on top and deliver solid financial results. This appears to demonstrate the resilience of its business model.

The good news is that the housing market is improving and house prices have been tipped to rise strongly once the pandemic passes. This is likely to lead to higher listing volumes and could result in an acceleration in its profit growth in the near future. Especially given its new revenue streams, costing cutting, and potential price increases.

Morgan Stanley is a fan of the company and has an overweight rating and $150.00 price target on its shares.

SEEK Limited (ASX: SEK)

The second blue chip to look at is SEEK. It is the dominant job listings company in the ANZ region and has a number of growing businesses around the world.

This includes the increasingly important Zhaopin business in China. It has been growing at a very strong rate in recent years and is quickly becoming a key part of the SEEK business.

So much so, Zhaopin is expected to play a key role in the company achieving its aspirational revenue target of $5 billion later this decade. This will be a material increase on the revenue of $1,577.4 million it reported in FY 2020.

Analysts at Credit Suisse are positive on the company’s future. They have an outperform rating and $28.50 price target on its shares.

More reading

• Why these leading ASX gold and tech shares could rally on through 2021
• Are heads in the clouds with these sky high P/E ratios?
• Why the REA Group (ASX:REA) share price thumped the market in 2020
• 4 of the best-performing ASX media shares in 2020
• 2 important investment lessons from 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 high quality blue chip ASX shares to buy now appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/38quHJb

Megaport Ltd (ASX: MP1) shares have lost more than 8% of their value over the last five days of trading, with no major news announced by the company. In fact, the Megaport share price had been dumped in the last four consecutive days of trading up until yesterday. 

Like other technology companies, Megaport shares seems to have been negatively impacted by recent fears the incoming Democrats in the United States Government will make sweeping changes to curb ‘Big Tech’, and tighten regulations in the industry in general.

By the market’s close today, the Megaport share price was trading 0.08% higher at $13.04.

What is Megaport and how did it perform in 2020?

Megaport is a global provider of elastic interconnection services. This means it provides corporate clients the flexibility to manage their bandwidth usage. Customers can scale up their bandwidth when demands are high, and then reduce consumption during off-peak periods.

The platform also leverages cloud-based technology to expand company networks beyond the reaches of traditional infrastructure.

The company has been an ASX success story in 2020, with the Megaport share price gaining by over 40% last year.

Megaport’s revenues jumped 66% year on year to $58 million in FY20. This came as companies shifted their employees to work-from-home arrangements, increasing the uptake of the kind of services Megaport offers.

The company’s good form has been carried into FY21, with it reporting a record first-quarter increase in customer numbers. Most of this growth came from the US.

Outlook

In Megaport’s annual general meeting in October, the company reported that it was positioned on a path to profitability.

Management said a key driver of this in FY21 would involve pushing the business to achieve breakeven on its earnings before interest, tax, depreciation, and ammortisation (EBITDA).

The core of the strategy will revolve around Megaport’s ‘Connected Edge’ platform. This allows customers to extend their networks closer to their branches and maintain them on-demand, instead of relying on traditional data centre models.

Megaport has still not achieved profitability since its initial listing on the ASX in 2015, however the company maintains it is well-funded for the next few years.

Based on the current Megaport share price, the company has a market capitalisation of around $2.1 billion.

More reading

• ASX 200 drops 1.1%
• How to invest in ASX shares in a post-COVID world 
• Here’s how the S&P/ASX All Technology Index fared in 2020
• Can these ASX IT shares carry their momentum into 2021?
• ASX 200 Weekly Wrap: ASX hits new post-March high

Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Megaport (ASX:MP1) share price is down 8% this week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3sfduKK

The S&P/ASX 200 Index (ASX: XJO) bumped higher today moving up 0.68% at the time of writing. Although the Materials sector has slightly dipped by just over 1%, these three ASX mining shares have all posted big gains.

European Metals Holdings Ltd (ASX: EMH)

The European Metals Holdings share price soared over 10% today, reaching $1.30. While it’s been a bumpy road, the company’s share price has roared over 300% in the past six-month period.

In recent news, the company appointed Ambassador Lincoln Palmer Bloomfield, Jr as a non-executive director. Ambassador Bloomfield will be based in Washington DC and has held several roles in the private sector promoting sustainability. European Metals said that he is a ‘valuable addition’ as part of the company’s commitment to support the European Commission’s new Batteries Regulation.

Copper Mountain Mining Corporation (ASX: C6C)

Copper Mountain Mining shares shot up an impressive 9.59% today, landing at $2.40. The share price posted booming gains after announcing record quarterly production with a positive 2021 outlook.

The announcement also advised that the company had exceeded its 2020 expectation to mine and develop between 70 to 75 million pounds of copper by 1.6 million pounds. The company’s 2021 guidance expects copper production to range from 85 to 95 million pounds.

Gold production is expected to be between 25,000 to 35,000 ounces and silver production is expected to be in the range of 500,000 to 550,000 ounces this year.

Talga Group Ltd (ASX: TLG)

The Talga Group share price jumped by 5% today to reach $1.89. The company posted an impressive 2020 share price gain of nearly 250% with big plans to make its mark in the electric vehicles market. Talga Group has been operating since 2011 with operations in Sweden, Germany and the UK.

Morningstar analysts believe Talga Group is undervalued, while Thomson Reuters has posted a neutral rating for the company.

In December, the company announced completion of a successful institutional placement to raise $25 million. The announcement also cites a Share Purchase Plan put in place to raise an additional $10 million. 

Investors and analysts alike will be keeping an eye out on what’s ahead after a $35 million capital bump. Talga has advised that all of the funds raised will be spent developing the company’s Vittangi Anode Project in Sweden.

More reading

• Why the Copper Mountain (ASX:C6C) share price is hitting a record high today
• Talga (ASX:TLG) share price rose 250% in 2020 as battery demand booms

Motley Fool contributor Gretchen Kennedy 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.

The post These 3 ASX mining shares are top risers today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3nqAgvw

The Mesoblast limited (ASX: MSB) share price could come under further pressure this year on rumours that it needs a capital injection.

The MSB share price fell 1.3% ahead of the close to $2.23 when the S&P/ASX 200 Index (Index:^AXJO) rallied 0.5%.

Shares in the biotech have been on the nose over the past few months and this won’t be a good time to go cap in hand to shareholders.

$100m cap raise cloud hanging over Mesoblast

But that’s exactly what broking firm CLSA is warning is likely to happen as Mesoblast needs to cover a close to $100 million cash shortfall, reported the Australian Financial Review.

CLSA’s analyst Hashan De Silva believes that Mesoblast will need to start repaying a US$75 million loan with Hercules Capital in two months.

Mesoblast has reportedly drawn down US$50 million of the debt facility, which attracts an interest rate of 9.45% a year.

Bad time to raise cash

The stock tumbled from peak of $5.50 at the end of September last year when its Ryoncil drug for a-GVHD was rejected for use by US health regulators.

Its clinical trials to treat heart failure and COVID-19 related acute respiratory distress syndrome (ARDS) also flopped last month.

“Without access to significant capital, whether it’s from capital raising, or from a third-party partner, or non-dilutive capital, it’s very difficult for Mesoblast to continue to fund their clinical trials in the not-too-distant future, in the next 18 months to 24 months,” De Silva told the AFR.

Why $100m may not be enough

While Mesoblast latest quarterly reported a cash holding of US$108 million, the company doesn’t generate a profit.

De Silva believes that management needs US$75 million ($97 million). But even that may not be enough after Mesoblast’s ARDS trial failed to meet its primary endpoint.

This is because the failure puts its partnership with Swiss drug-maker Novartis in question. The deal would see Novartis make a US$50 million upfront payment to Mesoblast. The payment is split 50:50 in cash and cash for equity.

De Silva doesn’t know if Mesoblast still qualifies for the payment. If Novartis walks, Mesoblast will need a second capital injection in FY22, according to De Silva’s calculation.

Should you buy the MSB share price now?

The broker has a “sell” recommendation on the Mesoblast share price with a 12-month price target of $1.22 a share.

Mesoblast isn’t the only ASX biotech to underperform. The CSL Limited (ASX: CSL) share price is also scrapping the bottom of its 12-month trading band.

More reading

• Citi picks the best international share markets that can beat the ASX in 2021
• The Energy Resources (ASX:ERA) share price is falling. Here’s why.
• Why is the CSL (ASX:CSL) share price trading around its COVID lows?
• Brokers just upgraded the Sonic (ASX:SHL) share price and this other ASX stock to “buy”
• ASX 200 up 0.4%: Afterpay & Zip charge higher, NAB rises, Harvey Norman hits new high

Brendon Lau owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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.

The post Mesoblast (ASX:MSB) share price could be facing more pressure in 2021 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3hRATgt

Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Accent Group Ltd (ASX: AX1)

According to a note out of Citi, its analysts have retained their buy rating and lifted the price target on this footwear retailer’s shares to $2.60. The broker lifted its price target after upgrading its earnings estimates to account for Accent’s positive trading update. The broker believes there could be more of the same in the future and suspects that its stronger profit margins could be sustained. The Accent share price was trading at $2.44 on Friday.

ARB Corporation Limited (ASX: ARB)

Another note out of Citi reveals that its analysts have upgraded this 4×4 parts company’s shares to a buy rating with a $34.25 price target. The broker made the move on the belief that ARB will benefit from robust car sales in Australia. In addition to this, the recent strengthening of the Australian dollar bodes well for its manufacturing costs in Thailand. The ARB share price ended the week at $31.37.

Atomos Ltd (ASX: AMS)

Analysts at Morgans have retained their add rating and $1.32 price target on this video technology company’s shares following its trading update. According to the note, the broker was pleased with its better than expected sales during the first half. Atomos reported sales of $32.6 million, compared to prior guidance of $28 million. And while it notes that management didn’t provide any earnings guidance, it did say that it expects to generate positive operating earnings for the first half. The Atomos share price ended the week at $1.04.

More reading

• Brokers just upgraded the Sonic (ASX:SHL) share price and this other ASX stock to “buy”
• Why Atomos, Corporate Travel Management, Fortescue, & Nick Scali are dropping lower
• Why Accent, Afterpay, Creso Pharma, & Thorn shares are charging higher
• Why the Accent (ASX:AX1) share price will be on watch this morning
• Why the Atomos (ASX:AMS) share price is shooting the lights out

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Atomos Ltd. The Motley Fool Australia has recommended Accent Group, ARB Limited, and Atomos Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Brokers name 3 ASX shares to buy right now appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3nnxw1J

As the first trading week of 2021 nears its end, the new year continues in the path of the old — delivering new global share market highs.

Despite the extraordinary turmoil on display in Washington DC, where rioters stormed the US Capitol Building to protest Joe Biden’s confirmation as president, every major US share index closed at new records yesterday (overnight Aussie time).

The S&P 500 Index (SP: .INX) gained 1.5%, while the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) again led the charge, closing the day up 2.6%. That puts the Nasdaq up more than 43% since this time last year.

Gold shares dip, tech shares rally

In late afternoon trading, the S&P/ASX 200 Index (ASX: XJO) is following the US lead higher.

The ASX 200 is up 0.5% today, for a gain of 2.4% since the closing bell on 31 December. That’s still 5.8% below its own all-time high, set on 20 February last year. But the upward trend since the 23 March trough remains in place.

While most gold shares are trending lower today, ASX tech shares are supporting the broader rally. The S&P/ASX All Technology Index (ASX: XTX) is up 1.6% in intraday trading.

But it’s important to remember these are just daily moves. Unless you’re day trading (good luck!), you may be wondering which ASX shares could be best placed to outperform through 2021.

As you’re likely aware, 2020 saw both well positioned gold and tech shares deliver outsized gains. Today we look at why they could have another good year ahead of them.

But first…

What’s a little insurrection between friends?

For the past two months, as you may recall, analysts the world over have been tripping over themselves to explain why a divided US Congress would be best for share markets.

In that scenario Joe Biden and the Democrats would have held the White House and the House of Representatives, while the Republicans would have had the majority in the Senate. That would have enabled the Republicans to keep a stronger check on some of the Democrats more ambitious programs.

It all came down to the runoff Senate election in Georgia this week. But that election ended up effectively handing control to the Democrats. With the Senate now equally divided (50-50) between the two parties, Vice President-elect Kamala Harris can cast any tie breaking votes.

The result?

While Biden still needs a two-thirds majority in the Senate for many policy changes, the US can expect more funding on green energy, infrastructure and fiscal stimulus spending.

Given the performance of the US markets yesterday, it appears investors’ animal spirits were stirred by a lifting of the uncertainty and the promise of more easy money. (Though this may all come with higher taxes and regulations down the road.)

After all, what’s a little insurrection between friends when the economic outlook remains strong?

Here’s what Nick Colas, co-founder of DataTrek Research wrote in a note (from Bloomberg):

Markets (rightly, in our view) see the U.S. government as ultimately a stable-enough set of institutions even if things occasionally go pear-shaped. Politics play second fiddle to economic and corporate fundamentals when it comes to setting asset prices. The country’s economic future coming out of the pandemic remains promising.

Looking ahead, Janus Henderson head of multi-asset Paul O’Connor said (from the Australian Financial Review):

Financial markets will likely focus on the prospects of more fiscal stimulus in the US in the short term, and higher taxes later on. Beyond fiscal policy, investor attention will now shift towards other areas of the Democrat policy agenda such as infrastructure spending, minimum wage increases and greater regulatory intervention across key industries.

Still, given that implementing legislation in many of the areas will still require 60 votes to pass in the Senate, it seems right to expect a ‘light blue’ version of the Democrat policy program, rather than the most radical version.

And Andrew Husby, a Bloomberg economist, writes:

We think additional near-term pandemic relief and accompanying stimulus could stretch into the $600 billion to $800 billion range. Subject to details and the course of the pandemic, the high end could be sufficient to lift growth by roughly 1.7 percentage points in 2021, to 5.2% year-over-year, with a faster pace continuing into 2022.

The case for ASX gold shares

With the US government potentially pumping out US$800 billion (AU$1 trillion) more stimulus spending than had been widely expected, gold may well shine on through 2021.

Here’s an excerpt from this morning’s Australian Financial Review (AFR):

“The strategic case for gold remains strong in our view,” say analysts at Goldman Sachs, who believe it could hit $US2300.

“If I was to say the gold price is to rise close to infinity you would think, ‘Macleod is a lunatic’,” says Alasdair Macleod, head of research for Goldmoney, the Canadian-listed precious metals custodian.

“If on the other hand, I was to suggest that the purchasing power of the pound or the dollar is likely to collapse to almost nothing you can then understand the argument better.”

We’ll leave off the near infinite gold price scenario for now. But if the Goldman Sachs analysts are correct, gold (currently trading for US$1,910 per ounce) could gain more than 20%.

That would prove a boon for some of 2020’s best performing ASX 200 gold shares.

Like Evolution Mining Ltd (ASX: EVN), which has seen its share price rise 28% since this time last year.

Or Saracen Mineral Holdings Limited (ASX: SAR), which enjoyed a 37% share price surge over the past 12 months.

ASX tech shares for 2021

Justin Braitling, chief investment officer at Watermark Funds Management, remains bullish on some of the best-known tech shares on the ASX. According to Braitling (quoted by the AFR):

Short term I think we’ll see a little bit of a correction, before the underlying reflation trade resumes – that being a weaker US dollar, stronger commodities, stronger risk assets, weaker bonds. Those are the four aspects of the reflation trade.

Braitling lists 4 traditional Aussie internet shares where he believes investors should “stay long”.

First, there’s Domain Holdings Australia Ltd (ASX: DHG). The Domain share price is up 21% since 8 January 2020.

Second, there’s SEEK Limited (ASX: SEK). Seek’s share price is up 21% over the past year.

Third, we have Carsales.Com Ltd (ASX: CAR). The Carsales share price gained 13% in the past 12 months.

And fourth, there’s REA Group Limited (ASX: REA). REA Group shareholders enjoyed a 39% share price gain since this time last year.

So if you’ve been struggling with whether to invest in gold shares or tech shares in 2021, the answer may be to do both.

More reading

• 5 things to watch on the ASX 200 on Friday
• Is the “Blue Wave” of US Democrats good or bad for ASX investors?
• 5 things to watch on the ASX 200 on Thursday
• How ASX shares in the automotive sector outperformed the market in 2020
• Are heads in the clouds with these sky high P/E ratios?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com Limited, REA Group Limited, and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why these leading ASX gold and tech shares could rally on through 2021 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3qcPYwb

Australian Ethical Investment Limited (ASX: AEF) shares were cruising higher today despite no price sensitive announcements out of the company. By the market’s close, the Australian Ethical share price was trading at $5.05, up 8.84% from yesterday’s close.

The rise in the Australian Ethical share price comes as the Democrats sit on the verge of taking control of the United States Senate. But more on that in a moment.

What Australian Ethical does

Australian Ethical is a funds management company that specialises in environmentally and socially responsible investments. Its business is divided into two key segments in the form of managed funds and superannuation. 

Australian Ethical’s managed funds business comprises eight different investment options and allows investors to invest from as little as $500.

The company’s superannuation arm aims to assist investors to “change the world through a retirement plan that performs well but also benefits humanity.”

So why is the Australian Ethical share price soaring?

One possible explanation for the impressive performance of the Australian Ethical share price today could be found in this article from The Wall Street Journal. It suggested that Joe Biden’s election win would likely result in greater impetus for green energy, in which Australian Ethical is a big investor.

For example, some of Australian Ethical’s renewable energy holdings include First Solar Inc (NASDAQ: FSLR) and Ormat Technologies Inc (NYSE: ORA). These shares saw rises of 6% and 7% respectively last night (our time).

Earnings update

Australian Ethical updated its earnings guidance in late December. The company advised that underlying net profit after tax was expected to be between $4.6 and $5.1 million. This represents an 11% increase on the 6 months ended 31 December 2019.

Australian Ethical also reported at the time that strong growth in funds under management was partially offset by the impact of superannuation fee reductions, including those implemented in the second half of FY20.

What now?

John McMurdo, CEO of Australian Ethical, provided an outlook of what’s to come:

We have seen excellent momentum in the first half of this financial year as a growing number of Australians seek to do good and do well with their money. Buoyed by excellent investment performance, we expect this strong growth in net inflows to continue.

He went on to say…

Financials in the second half of the financial year compared to the first half will be impacted by higher operating expenses, as well as increased investment in strategic and regulatory initiatives as we position our business for continued success.

More reading

• ASX 200 falls 1.2% on Friday
• 3 reasons why Australian Ethical (ASX:AEF) shares could be worth buying
• Got cash to invest? Here are 3 ASX growth shares to buy

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends First Solar. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why did the Australian Ethical (ASX:AEF) share price storm 9% higher today? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3s73seD

The KGL Resources Ltd (ASX: KGL) share price is soaring again today, continuing the strong gains seen throughout the week.

This meteoric rise in the company’s shares comes off the back of yesterday’s announcement that it received a mining management plan approval, which saw its share price rise by 24.53% in one day.

So far today, the miner’s shares have risen another 12.12% to 37 cents. This reflects a significant increase in the KGL share price of more than 37% since the start of the week.

Why has the KGL share price accelerated?

Yesterday, KGL announced the Northern Territory government has given the green light for a mining management plan for the company’s Jervois copper project.

A primary objective of a mining management plan is to formalise mining developments that will be carried out on site. The plan ensures that the environment is impacted at a minimum over the course of the mine life.

The approval was a key requirement in developing the Jervois project as a low-cost copper mine. The company estimates the site to have 9.4 million tonnes of copper at a high grade of 2.41%. This comes as the world is seeing a decrease in quality of the base metal, thus highlighting the superiority of the Jervois mine.

KGL believes that demand for copper will surge as the market moves to using more green energy and electric vehicles. In addition, demand from traditional applications that use copper such as construction, electricity transmission, communication and consumer goods is also expected to rise.

Following the approval, Kentor Minerals (owned by KGL) will seek to develop the mine, which will include processing and production of a copper concentrate and lead/zinc concentrate.

What did KGL management say?

KGL chair Mr Denis Wood commented on the pleasing outcome, saying:

The recently announced Pre-Feasibility Study (PFS) results show that the high-grade Jervois deposit will support a robust initial 7.5-year mining operation. We are confident the drilling about to start in the new year will improve the quality and size of the resource.

The new information will be fed into the full Feasibility Study (FS) which now has the Company’s highest priority. Work is already well advanced on the FS which we expect will improve the economics of Jervois even further.

With the PFS completed and the authority to mine now in place, discussions have begun on project financing and the marketing of the mine’s concentrate.

About the KGL share price

Looking back to the last 12 months, the KGL share price has risen over 60%. The miner’s shares suffered a dip during the March crash where investors were able to pick up its shares for 9.4 cents, but shares have since rebounded strongly.

On current prices, KGL has a market capitalisation of $110.79 million.

More reading

• The KGL (ASX:KGL) share price has surged 11% today. Here’s why.

Motley Fool contributor Aaron Teboneras 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.

The post Why the KGL (ASX:KGL) share price is up 37% this week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2LtnxLk

The BrainChip Holdings Ltd (ASX: BRN) share price has been among the best performers on the ASX on Friday.

At one stage today the artificial intelligence company’s shares were up as much as 15% to 56.5 cents.

This latest gain means the BrainChip share price is up over 55% since this time last month.

Why is the BrainChip share price zooming higher?

While there hasn’t been any news out of the company this week, investors appear to be still responding to a couple of major announcements released at the end of December.

The first announcement the company released was in relation to its agreement with NASA in the United States.

According to the release, BrainChip has received an order for its Akida Early Access Evaluation Kit from NASA. The space agency will use the evaluation kit within its shared service centre at the NASA/Ames research centre (ARC) in California.

This is expected to allow NASA to evaluate the Akida technology for potential use in programs with a neuromorphic processor that meet spaceflight requirements.

Management believes the processor is suitable for spaceflight and aerospace applications due to the device being a complete neural processor. This means it does not require an external CPU, memory, or Deep Learning Accelerator.

Given that reducing component count, size, and power consumption is a big concern in spaceflight and aerospace applications, this is a big positive.

However, it is worth noting that there’s no guarantee that NASA will take things further once it has evaluated the technology. Furthermore, there are other companies with deep pockets with similar technologies.

What was the second announcement?

The other announcement that got investors excited was an agreement with global semiconductor manufacturer Renesas Electronics America. It specialises in microcontroller and automotive system-on-chip products.

This agreement will see BrainChip deliver its Akida technology for use as a system-on-chip licensed product and includes a single-use design license, implementation support services, royalty payments per unit, and software maintenance services for two years.

Management believes the technology is also well suited for advanced driver assistance systems (ADAS), autonomous vehicles, drones, vision-guided robotics, surveillance, and machine vision systems. These are areas which Renesas has a specialty in.

More reading

• This is the latest speculative ASX tech buy from Citigroup
• Why the BrainChip (ASX:BRN) share price rocketed 57% higher
• Why AVZ Minerals, BrainChip, BSA, & Credit Corp shares are storming higher
• BrainChip (ASX:BRN) share price on watch following major announcements
• Why Brainchip Holdings (ASX:BRN) shares are in a trading halt

Motley Fool contributor James Mickleboro 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.

The post Here’s why the BrainChip (ASX:BRN) share price jumped 15% today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3s3Aqwg

As well as being home to countless blue chip shares, the Australian share market is home to a good number of promising small caps.

Two small cap shares that could be deserving of a spot on your watchlist are listed below. Here’s what you need to know about them:

IntelliHR Ltd (ASX: IHR)

The first small cap to look at is IntelliHR. It is a cloud-based human resources and people management platform provider.

IntelliHR has been growing at a very strong rate this year. During the first five months of FY 2021, the company delivered a sizeable 148% increase in subscriber numbers to over 30,000 contracted subscribers.

This strong customer growth has translated into strong recurring revenue growth so far in FY 2021. As of its last update, IntelliHR’s contracted annual recurring revenue (ARR) was up 81.3% to $2.8 million.

Management appears confident there will be more of the same in future thanks to its quality software, international expansion, and favourable industry trends. It notes that the company is well-placed in a high growth global market being disrupted by the Working-from-Home trend.

Volpara Health Technologies Ltd (ASX: VHT)

Another small cap to look at is Volpara. It is the New Zealand-based healthcare technology company behind the VolparaEnterprise software solution.

This product is a cost-effective, mission-critical tool that helps clinics deliver the highest-quality breast imaging services. In addition to this, the company has a growing number of add-on solutions that work with VolparaEnterprise.

These add-ons are expected to drive material average revenue per user (ARPU) growth in the future. At the end of the first half, the company’s ARPU stood at US$1.16. However, management is aiming to grow this to US$10 in the future through its full product suite.

One broker that is a fan of Volpara is Morgans. It currently has an add rating and $1.71 price target on its shares.

More reading

• 3 quality SaaS ASX shares to buy
• The top 5 performing ASX SaaS shares of 2020
• 3 exciting small cap ASX shares to buy
• 5 exciting small cap ASX shares to watch in 2021
• Top brokers name 3 ASX shares to buy today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends VOLPARA FPO NZ. The Motley Fool Australia has recommended VOLPARA FPO NZ. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 exciting small cap ASX shares to watch appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3s5xOy8