ASX small-cap Hipages Group Holdings Ltd (ASX:HPG) hasn’t exactly lit up the market since listing on the ASX back at the beginning of November.

After floating for a price of $2.45, its shares have trended consistently downwards, and a despite a recent bump are still trading at just $2.40. But despite that lacklustre performance, hipages has at least one new fan in major broker Goldman Sachs.

What does hipages do?

hipages operates an online marketplace that connects consumers with residential tradespeople (‘tradies’) for home improvement and maintenance jobs. The hipages platform allows users to provide descriptions and upload photos of the work they would like completed, and multiple tradies can then offer quotes for the job. Customers can then connect with the highest-rated tradie at their desired price point.

The company makes money by charging tradies monthly subscription fees for registering on its platform. It offers a number of pricing tiers to tradies: the more they are willing to pay per month, the more potential jobs they can accept through the platform.

hipages plans to expand its product offering over the next few years to also provide invoicing and payment services through its platform. This will further streamline the way in which its registered tradies and customers can interact and do business.

What does Goldman like about hipages?

Goldman believes hipages can leverage its market leading position to drive further growth over the next year. It initiated coverage of the company in early December and slapped a 12-month price target of $2.90 on the company’s shares. Even after a recent jump in the company’s shares – which was probably triggered by Goldman’s buy recommendation – that still represents more than a 20% upside on the current share price.

Goldman believes there is a big market opportunity for hipages to tap into. According to its report on the company, Australians spend around $83 billion on home improvements annually. And there are well over 1 million individual tradies across the country competing for those jobs. This means that there is a huge addressable market for the hipages platform.    

Goldman also believes that the hipages business model is scalable and will soon begin to deliver efficiencies. The company’s brand awareness is increasing rapidly, meaning that sales and marketing costs per job listing are declining. Individual tradies are completing more jobs through the platform and repeat usage rates are up.

This means that hipages will be able to keep its cost base low while top line revenues continue to grow, expanding its margins. From now until 2023, Goldman expects revenue to increase at a compound annual growth rate (CAGR) of 12%. However, the broker believes that cost efficiencies will mean that earnings before interest, tax, depreciation and amortisation (EBITDA) will grow at a much higher CAGR of 36% over the same period.

The risks

Goldman identifies a number of key risks that could scupper their growth forecasts for hipages. These include threats from other similar online marketplaces like airtasker, as well as high tradie churn and high subscription prices.

But overall, Goldman remains bullish on the near-term prospects for hipages, and believes the company has a significant market opportunity ahead of it.

More reading

• Why the Hipages (ASX:HPG) share price could be going 36% higher from here

Motley Fool contributor Rhys Brock 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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Buying dividend shares today could be a sound means of obtaining a growing passive income over the long run. In many cases, they offer high yields after having not fully recovered from the 2020 stock market crash. And, with the global economic outlook set to improve, they may deliver rising dividends over the coming years.

Therefore, even if an investor has no savings at age 50, there may be time for them to build a worthwhile passive income between now and when they retire.

Buying dividend shares with high yields

High yields among many of today’s dividend shares do not only mean that they offer a generous passive income in the short run. A high yield also suggests that they may be priced at levels that do not fully factor in their long-term financial prospects.

For example, some consumer goods companies and energy stocks have high yields at the present time compared to their historic averages. This could be because they face difficult short-term outlooks that may dampen their financial prospects.

However, in many cases, such companies have solid financial positions and the right strategies to adapt to changing consumer tastes. This could mean that they can deliver impressive financial performances over the long run that translate into rising share prices.

Buying dividend stocks with growth potential

As well as focusing on dividend stocks with high yields, buying companies with growth potential could be a sound move. Businesses that are likely to benefit from industry-wide trends, such as an increasing shift towards a digital world, may be able to deliver stronger sales and profit growth than their peers.

This may have a positive impact on their valuations over the long run. It may also enable them to pay a rising dividend that increases their popularity among investors in an era of low interest rates.

A rising dividend may also significantly improve an investor’s level of passive income over the long run. Compounding can mean that an above-average dividend growth rate turns a modest yield today into a very attractive level of income in the coming years.

Building a retirement portfolio

Even though dividend stocks could provide strong returns over the coming years, even an investment in a diverse range of shares that matches the market’s return can produce a surprisingly large portfolio.

An investor who is aged 50 with no savings is likely to have at least 15 years left until they retire. In this time, a similar growth rate to the stock market’s historic return of 8% would turn a $750 monthly investment into a portfolio valued at $260,000.

However, through buying high-yielding stocks with dividend growth potential, it is possible to outperform the market. Doing so could provide greater financial freedom in retirement.

More reading

• Why this major broker thinks the hipages (ASX:HPG) share price is a ‘buy’
• Qube (ASX:QUB) share price inches higher after Moorebank update
• Iron ore prices poised to hit US$180 next month: Westpac
• Origin (ASX:ORG) share price on watch today after this announcement
• 3 ASX shares for growth, income, and value investors

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Qube Holdings Ltd (ASX: QUB) share price is inching higher at market open, after the company announced an update on the much anticipated sale of its Moorebank Logistics Park (MLP) project.

The Qube share price opened at $3.00, up by 0.33%.

What was the update

In a short release to the market, the logistics company advised that its negotiation with Logos Property Group is progressing constructively with the due diligence process substantially complete.

The company says significant progress was made on agreeing the key commercial issues for the 100% sale of its warehousing assets to Logos, while still retaining interest in the terminals assets.

The company says that Logos continues to “demonstrate a clear appreciation of the high quality and significant strategic value of the MLP.”

Qube says that both companies will continue to finalise the outstanding commercial issues in the near term, but has warned that there is no certainty that a transaction will occur.

What’s the Moorebank Logistics Park

MLB is Australia’s largest freight infrastructure project, and will link Port Botany direct to rail terminals and warehousing. It sits on a 243-hectare site just 35km from Sydney’s central business district.

The sale of this project has been on the cards since August, and a price tag of $2 billion has been mentioned.

This comes as Qube faces problems on its balance sheet, after reporting a 55% fall in annual profit to $87.5 million. Analysts have said that if Qube can’t offload Moorebank, it will be forced to recapitalise.

In September, Logos emerged as a contender to buy the asset, and the companies agreed at the time to enter into an exclusive negotiation period.

About the Qube share price

Qube is Australia’s largest provider of import and export logistics services. The Aussie company operates at more than 125 locations across Australia, New Zealand, Papua New Guinea and South East Asia.

The coronavirus pandemic has disrupted international commerce and logistics routes this year. The Qube share price is lower by 8% lower in 2020, after plummeting by 50% in May.

At today’s share price, Qube commands a market cap of $5.7 billion.

More reading

• Iron ore prices poised to hit US$180 next month: Westpac
• Origin (ASX:ORG) share price on watch today after this announcement
• 3 ASX shares for growth, income, and value investors
• BHP (ASX:BHP) share price on watch after Samarco update
• Robinhood phenomenon lures Gen Z and Millennial investors, but will it continue?

Motley Fool contributor Eddy Sunarto 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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The Chinese government’s attempt to cool the iron ore price has not stopped some experts from predicting another surge as early as next month.

Westpac Banking Corp (ASX: WBC) believes the stars are aligned for the steel-making mineral to rally close to 20% in January to circa US$180 a tonne, reported the Australian Financial Review.

That should keep the BHP Group Ltd (ASX: BHP) share price, Rio Tinto Limited (ASX: RIO) share price and Fortescue Metals Group Limited (ASX: FMG) share price supported in the near-term, even as the iron ore price lost ground for the second day.

Iron ore price weakness is temporary

Iron ore futures fell 1.9% in Singapore to US$161.10 a tonne, while the price on the Dalian exchange tumbled 5.8% to 1,026.50 yuan (US$156.95) a tonne.

The commodity has fallen 11% in just two days in Dalian after Chinese regulators curbed some trading accounts to stop speculators from trading.

However, Westpac’s analysts Justin Smirk thinks demand-supply fundamentals are enough to push the commodity higher.

Diverse tailwinds supporting the commodity

He noted that iron ore inventories at Chinese ports are stuck at cyclical lows. This is despite rising steel production and strong iron ore imports.

Further, the import price of the ore is trading at a significant premium to the locally produced commodity. This signals how strong demand is for imported ore.

“The margins for [Chinese] steel mills have been supported by rising steel prices which is allowing for the ongoing bidding up of input costs,” the AFR quoted him as saying.

“With steel prices continuing to lift further through December, and steel inventories (at both traders and steel mills) rising only modestly, it appears that strong steel sales will continue to be supportive of high iron ore prices at least into the first half of 2021.”

Growing demand, weak supply

In the year to November, Chinese steel production climbed 9%, according to Westpac. Most of the growth comes in more recent months as China emerged from the COVID‐19 disaster.

The increase compares to the 8% growth in steel output for 2019.

In contrast, supply of the ore has not kept up with demand. Major Brazilian ore producer Vale SA downgraded its output guidance for 2020 and 2021 as COVID hampered its operations.

Brazil and Australia are also entering into the “wet season” and further disruptions to shipments are likely.

While most analysts do not think the commodity can hold at recent highs, the iron ore price looks well placed to spike higher in the near-term.

It’s not only the major ASX iron ore miners that stand to benefit. The Deterra Royalties Ltd (ASX: DRR) share price and Mineral Resources Limited (ASX: MIN) share price will also find favour with investors.

More reading

• BHP (ASX:BHP) share price on watch after Samarco update
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 ends 0.7% higher
• Are these the 2 best ASX shares to buy right now?
• 2 ASX dividend shares with fully franked yields over 7% today

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Deterra Royalties Limited, and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

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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Origin Energy Ltd (ASX: ORG) has announced that it will invest an additional £36 million (A$65 million) in Octopus Energy to maintain its 20% equity stake.

This follows a partnership between Octopus and Tokyo Gas that will see the launch of Octopus into the Japanese market.

The Origin share price will be on watch when the ASX market opens this morning, after closing at $4.79 on Wednesday.

What’s the deal?

Under the agreements, leading Japanese utility Tokyo Gas will take a 9.7% equity share in Octopus for a consideration of US$200 million.

Octopus and Tokyo Gas will also establish a new retailer, TG Octopus Energy, that will pursue growth in Japan, one of the world’s biggest  energy markets comprising 83 million electricity customers and 25 million gas customers.

Origin says that it’s lifting its investment in Octopus to maintain 20% equity share because the company has seen material value since its initial investment in May this year.

Since May, Octopus has grown UK customer accounts by approximately 300,000 to 1.8 million, and launched in the United States and German markets.

Today’s investment in Octopus is on the same commercial terms as Tokyo Gas, and will be paid in three tranches based on agreed milestones, with 75% expected in FY21 and the remainder in FY22 and FY23.

Commenting on the investment, Origin chief executive officer, Frank Calabria said:

We are lifting our investment in Octopus to maintain our 20 per cent equity share because we see strong potential in our strategic partnership, underpinned by our confidence in Octopus’ operating model, market-leading technology and management team.

We have already reached Origin’s target to have 50,000 customers on the platform by the end of 2020, and we will progressively move more customers to the platform.

Why did Origin invest in Octopus

In May 2020, Origin entered a strategic partnership with UK-based Octopus Energy, taking a 20% equity share for approximately $500 million.

The deal included obtaining a perpetual license to Octopus’  flagship technology platform, Kraken, in Australia.

Origin said that it would deploy the innovative Kraken platform developed by Octopus, which would streamline and automate many interactions between Origin and its electricity customers.

At the time, the company said that the investment would pay for itself relatively quickly, saying the shift to the Kraken platform will deliver immediate savings of $70-$80 million in 2022, growing to as much as $150 million annually within the next five years.

How has the Origin Energy share price performed in 2020

The Origin Energy share price has fallen by more than 50% this year as the coronavirus pandemic took a toll on its export business.

The share price had a 52-week high of $8.82 reached in January, and a low of $3.75 reached in March.

At this price level, Origin commands a market cap of $8.4 billion.

More reading

• Here’s how ASX 200 energy shares have performed in 2020 so far
• ASX company busted allegedly misleading customers
• Why the Origin Energy (ASX:ORG) share price has dipped today
• Which ASX 200 sectors performed the best in November? 
• Brokers name 3 ASX shares to buy right now

Motley Fool contributor Eddy Sunarto 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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Are you looking for options for your portfolio in January? Well, whether you’re a growth, income, or value investor, one of the shares listed below could be worth considering.

Here’s what you need to know about them:

Appen Ltd (ASX: APX)

If you’re a growth investor, then Appen could be worth a look. Through its team of over one million skilled contractors, Appen provides or prepares the training data for artificial intelligence (AI) models. It counts the likes of Amazon, Facebook, Google, and Microsoft as customers. While COVID-19 is stifling its growth this year, management expects demand to bounce back strongly in 2021 when the pandemic passes. Analysts at UBS appear confident that this will be the case. They recently retained their buy rating and $44.00 price target on its shares.

People Infrastructure Ltd (ASX: PPE)

Value investors might want to check out People Infrastructure. It is a leading workforce management company that provides innovative solutions to workforce challenges. In FY 2020, the company reported a 49.2% increase in normalised EBITDA to $26.4 million. While the new financial year is going to be harder because of the pandemic, analysts at Morgans remain positive on the company. They expect People Infrastructure to deliver earnings per share of 22 cents in FY 2021. This means its shares are changing hands for just ~16x forward earnings right now. They also offer a decent fully franked ~3.2% dividend yield based on the broker’s forecasts.

Telstra Corporation Ltd (ASX: TLS)

If you’re an income investor, you might want to take a look at Telstra. Thanks to a combination of cost cutting, rational competition, and a positive growth outlook in the mobile business, Telstra has been tipped to return to growth in the not so distant future. Which, after years of dividend cuts, should mean Telstra will soon be in a position to start increasing its payouts once again. For now, though, analysts at UBS are expecting the company to keep paying its 16 cents per share dividend in FY 2021 and FY 2022. The broker has a buy rating and $3.85 price target on its shares.

More reading

• The NBN is finally finished. Is Telstra (ASX:TLS) waiting in the wings?
• Why the BSA (ASX:BSA) share price is on watch today
• 2 ASX dividend shares with big yields
• 2 dirt cheap ASX shares to buy in 2021
• Why Bigtincan, Over the Wire, Resolute, & Uniti shares are dropping lower

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 Appen Ltd and People Infrastructure Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended People Infrastructure Ltd. 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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The BHP Group Ltd (ASX: BHP) share price will be one to watch this morning after the release of an update.

What did BHP announce?

This morning BHP provided an update on its Samarco operation in Brazil, which is co-owned with Brazilian mining giant Vale.

According to the release, Samarco has now met the licensing requirements to restart its operations at the Germano complex in Minas Gerais and its Ubu complex in Espírito Santo, Brazil. As a result, the mining giant has commenced iron ore pellet production.

This comes just over five years since Samarco’s operations were suspended following the failure of the Fundão dam on 5 November 2015. That dam failure led to the tragic loss of 19 lives at the operation.

Management advised that Samarco’s gradual restart of operations incorporates concentrator 3 at the Germano complex and pelletising plant 4 at Ubu. There will also be a new system of tailings disposal combining a confined pit and tailings filtering system for dry stacking.

Independent tests have been carried out on Samarco’s preparations for a safe restart of its operations. The company expects to initially produce approximately eight million tonnes of iron ore pellets per annum.

What has happened over the last five years?

The company revealed that extensive work is still being undertaken by the Renova Foundation to remediate and compensate for the damages of the failure of the Fundão dam in 2015 and that BHP Billiton Brasil continues to support Renova in its work.

By November 2020, Renova had spent approximately BRL 10.7 billion (approximately US$2.1 billion) on its remediation and compensation programs.

In addition to this, over the same period, approximately BRL 3.1 billion (approximately US$620 million) had been paid in indemnities and emergency financial aid to approximately 325,000 people.

Iron ore price softens.

Potentially offsetting this positive update is news that the iron ore price softened overnight.

According to CommSec, the spot iron ore price lost US$3.95 or 2.4% to end the session at US$163.05 a tonne.

This could put a bit of pressure on the shares of BHP, Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO) today.

More reading

• Are we heading for a new ASX resources ‘supercycle’?
• Why is everyone talking about the iron ore price?
• ASX miners put on alert as the iron ore price crashes overnight
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps
• Iron ore hits 9-year high: What this means for BHP, Fortescue, & Rio Tinto

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.

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Well, 2020 has certainly been an eventful year, from raging bush fires to widespread pandemic panic. If one thing is for sure, we are eager to put it behind us and start afresh in 2021.

One phenomenon I will be watching in the coming year is the Millennial and Gen Z participation in the market. There have been strong catalysts this year for the massive influx, but there are also risks to this trend.

Why the trend?

Unfortunately for my young comrades (being a Millennial myself) the pandemic has hit us hardest when it comes to both unemployment and under-employment.

According to the labour force data from the Australian Bureau of Statistics, in November the youth unemployment rate increased another 0.1 percentage point to 15.6%. However, this is still lower than the 23-year record high in June, at 16.4%.

With such a high unemployment rate, the younger demographic was left sitting at home wondering what to do next.

It seems that when you mix youthful exuberance, boredom, and desperation, you get beginner investors trying their luck at share market trading. This concoction has already been dubbed the ‘Robinhood phenomenon’, popularised by the US-based fee-free trading app, Robinhood.

Data in Australia indicates that more than 40% of Millennials and Gen Zers bought shares for the first time this year, as reported in the Australian Financial Review. This is a far greater uptake than other demographics and implies these younger people were seeking a new avenue for income.

What are the risks?

When you drop a novice into a pro arena, the outcome is usually not good for the novice. It is fine to risk what you can afford to lose while gradually building up experience. When unemployed, however, what you’re risking is your next rent – or possibly (thanks to the government) your superannuation.

Unfortunately, getting rich overnight on a penny stock or pulling a full-time job’s worth of income in dividends tends to be reserved for very few people. The more common outcome is sub-optimal returns for the investor looking to make a quick fortune.

The problem (although a good problem to have in the short term) is that the market has rallied hard since the 23 March low, with the S&P/ASX 200 Index (ASX: XJO) returning just over 46% at the time of writing.

If you invested in some reasonably notable shares in March/April you would have a decent profit by now. Though the market doesn’t go up forever and beginner investors should be mindful of their exposure in the event of another bear market.

If only we had a crystal ball

To say what 2021 entails would be impossible, although it would be nice if it was a little less eventful.

There are two ways I can see it going – either the number of new young investors will go down or up with the youth unemployment rate, or Pandora’s box has been opened and the phenomenon will continue to thrive, irrespective of the unemployment rate.

It certainly will make for an interesting year ahead.

More reading

• The NBN is finally finished. Is Telstra (ASX:TLS) waiting in the wings?
• BrainChip (ASX:BRN) share price on watch following major announcements
• Got cash to invest? Here are 3 ASX shares to buy
• Why the BSA (ASX:BSA) share price is on watch today
• What to do when your shares are heavily shorted

Motley Fool contributor Mitchell Lawler 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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Those of us with longer memories (or perhaps just longer lifespans) might remember the origins of the National Broadband Network (NBN). It was first announced as an election promise back in 2007, upon which construction began shortly afterwards.

There have been many ups and downs since, as well as a seismic disruption to the telecommunications landscape in Australia – as shareholders of Telstra Corporation Ltd (ASX: TLS) would know.

In building the NBN, the NBN Co required Telstra’s old telephony network of copper wires and ducts to lay the infrastructure required to underpin of the new fibre optic cable. The impacts of this sale have been immense for Telstra shareholders.

Since Telstra could no longer both own a single national cabling network, and charge its competitors for the privilege of using it alongside it, the company is a lot smaller today than it used to be. Rewind the clock back to 2015 and Telstra was a company with a $6.60 share price, and about to pay an annual dividend of 32 cents a share.

Today, Telstra is a company with a share price of $3.01 (at the time of writing). Its investors have enjoyed just 16 cents per share in dividends in 2020.

But things could be coming full circle for Telstra.

Telstra calls NBN home

According to reporting in the Australian Financial Review (AFR), after almost 13 years, the federal communications minister has announced that the NBN is finally complete and “fully operational”. And that means that the NBN is one step closer to the government’s intended goal of privatisation.

According to the report, this declaration is one of 4 steps that the NBN will need to fulfil in order for a sale. The other steps reportedly include a lengthy Productivity Commission enquiry.

However, the AFR reports that, in a rather poetic turn of events, Telstra is the leading contender to buy the NBN back off the government when it does get the final green light for sale. There are likely to be competitors for the NBN such as superannuation funds.

But the AFR notes that any future owner that isn’t Telstra would have to pay up every year to keep using Telstra’s infrastructure, as the NBN does today. That means Telstra would be the only bidder without this handicap to overcome. As such, Telstra is considered the frontrunner.

Well, it won’t exactly be ‘Telstra’ owning the NBN, rather Telstra’s infrastructure division InfraCo. The report tells us that if Telstra did decide to bid, “the Australian Competition and Consumer Commission has been clear it would have to separate [InfraCo] from Telstra and become its own standalone company”.

So perhaps Telstra shareholders have a spin-off to look forward to at some point in the next few years. If the report is to be believed of course. Something for Telstra shareholders to keep in mind!

More reading

• Why the BSA (ASX:BSA) share price is on watch today
• 2 ASX dividend shares with big yields
• Why Bigtincan, Over the Wire, Resolute, & Uniti shares are dropping lower
• 2 blue chip ASX shares to buy for 2021
• Cimic (ASX:CIM) share price falls despite positive update

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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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The BrainChip Holdings Ltd (ASX: BRN) share price is on watch this morning as it comes out of a trading halt. The company’s shares were previously suspended pending a market announcement.

After yesterday’s market close, the artificial intelligence technology company provided two major announcements. The first in relation to an order for its Akida Early Access Evaluation Kit, and the second, a signing of an intellectual property license agreement.

The BrainChip share price closed at 32.5 cents, up 3.1% before being placed in a trading halt on Tuesday.

NASA places an order

According to its release, BrainChip advised that the United States National Aeronautics and Space Administration (NASA) has placed an order for its Akida Early Access Evaluation Kit.

Under the early access program, NASA will use the Akida Early Access Evaluation Kit within its NASA shared service centre (NSSC) at the NASA/Ames research centre (ARC) in California.

The early access program is bestowed to a select group of customers that can have immediate access to the Akida device, evaluation boards and technical support. In exchange for inclusion to the program, BrainChip collects a payment that offsets expenses to provide ongoing support.

NASA will use the kit to examine how Akida technology using a neuromorphic processor will meet its stringent spaceflight requirements. Brainchip highlighted that the Akida neuromorphic processor is capable and fits within spaceflight and aerospace constraints.

The ground-breaking device simulates the functionality of the human neuron without the need for an external CPU, memory or deep learning accelerator. This is important as the reduction in parts requires less size and power, thus fulfilling the minimal component count requirement.

Licencing agreement

In other news, BrainChip also advised it signed an intellectual property license agreement with Renesas Electronics America Inc.

Renesas Electronics America Inc. is a subsidiary of parent company, Renesas Electronics Corp. The latter which is a global semiconductor manufacturer that specialises in microcontroller and automotive system-on-chip (SoC) products.

Under the unconditional agreement, BrainChip will deliver its Akida technology to Renesas Electronics America for use as a SoC licenced product. The deal will include a single-use design license, implementation support services (at an agreed cost), royalty payments per unit, and software maintenance services for 2-years.

The Akida SoC is a small, low cost and low power product that makes it ideal for cutting edge applications. These include advanced driver assistance systems (ADAS), autonomous vehicles, drones, vision-guided robotics, surveillance and machine vision systems.

What did the CEO say?

Commenting on the new order, BrainChip CEO Louis DiNardo said:

We are both excited and proud that NASA has procured Akida as part of our Early Access Program. The recognition that neuromorphic computing may play an important role in spaceflight applications is an important milestone for our industry.

We hope that the potential benefits from the Akida neuromorphic processor for use in spaceflight and aerospace applications may provide a valuable contribution to further NASA’s primary mission to benefit humanity.

Mr DiNardo went on to speak about the licencing agreement:

This is an exciting and significant milestone in obtaining the Company’s first IP licensing agreement. Furthermore, this is a market validation of our technology.

Licensing Akida IP also provides us with an opportunity for recurring revenue over the lifetime of our customer’s SoC product. We are equipped to help additional customers integrate Akida technology into their products, which benefit from low power and real-time performance, as well as extend capabilities to provide AI solutions to IoT devices at the edge without the need for cloud connectivity.

About the BrainChip share price

The BrainChip share price fell from glory in September after reaching as high as 97 cents. Although at current prices, its shares are down 66% from its all-time high, the company is up 673% over the past 12 months.

BrainChip has a market capitalisation of $525.4 million at the time of writing.

More reading

• Why Brainchip Holdings (ASX:BRN) shares are in a trading halt
• Why the BrainChip (ASX:BRN) share price is charging higher
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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 BrainChip (ASX:BRN) share price on watch following major announcements appeared first on The Motley Fool Australia.

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