If you want to build a balanced portfolio, having a few blue chip ASX shares in there could be a smart move.

Blue chip shares tend to be companies that are well-known, long-established, and have strong financial positions. 

With that in mind, listed below are two ASX blue chip shares that come highly rated:

Goodman Group (ASX: GMG)

The first blue chip to look at is Goodman Group. It is an integrated commercial and industrial property group which has generated consistently strong returns for investors over the last decade.

This has been driven by the diversity of its portfolio and its exposure to quick growing markets such as ecommerce. Pleasingly, the latter market has resulted in strong demand from blue chip customers such as Amazon, DHL, and Walmart. And given the way the pandemic is accelerating the shift to online shopping, these properties look set to be in strong demand for a long time to come.

One broker that is very positive on Goodman Group is Morgan Stanley. It has been pleased with its development work in recent months, its sky high occupancy rates, and the yields it is commanding. As a result, it has an overweight rating and $20.90 price target on its shares. This compares to the latest Goodman share price of $17.56.

Ramsay Health Care Limited (ASX: RHC)

Another ASX blue chip share to consider is Ramsay Health Care. Trading conditions were tough for the private hospital operator in 2020 because of the pandemic, but things are certainly improving now.

In fact, a note out of Goldman Sachs this week reveals that it believes Ramsay is trading largely as normal in Australia now. It commented: “Contrary to many other hospital groups globally, most of RHC’s core market has been operating largely unencumbered since July, and entirely without volume limitations since end-November.”

This is a big positive given that almost two-thirds of its earnings are generated in the local market.

In light of this, a significant backlog of surgeries, and its belief that Ramsay is well-placed for solid earnings growth over the coming years, Goldman Sachs upgraded its shares to a conviction buy rating.

The broker has a price target of $70.00 on its shares. This compares to the latest Ramsay share price of $63.31.

More reading

• Why Data#3, JB Hi-Fi, Ramsay, & Zip shares are charging higher
• ASX 200 down 0.5%: JB Hi-Fi guidance impresses, Super Retail update, Ramsay surges
• Ramsay Health Care (ASX:RHC) share price on watch after broker upgrade
• 5 things to watch on the ASX 200 on Monday
• 2 ASX 50 shares to buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care 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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With earnings season on the horizon, I thought I would start to take a look at what is expected from some of Australia’s most popular companies.

Earlier today I looked at Coles Group Ltd (ASX: COL). You can read about that here. Whereas on this occasion, I’m going to take a look at its rival Woolworths Group Ltd (ASX: WOW).

What is expected from Woolworths in the first half of FY 2021?

Due to the favourable changes in consumer spending because of COVID-19, expectations are high for Woolworths in FY 2021.

However, one leading broker that suspects the retail giant could fall short of expectations is Goldman Sachs. In light of this, it will come as no surprise to learn that it has a neutral rating on the Woolworths share price.

According to a broker note, Goldman is expecting Woolworths to deliver total revenue of $35,789.7 million in the first half. This will be a 10.1% increase on the prior corresponding period.

Its analysts expect this to be driven by a 10.9% lift in Australian Food sales to $23,520.1 million, a 17.6% jump in Endeavour Drinks sales to $5,616.2 million, a 15.3% increase in Big W sales to $2,477.6 million, and a 1.1% rise in NZ Supermarket sales to $3,403.6 million.

Partially offsetting this will be its Hotels business, which has struggled during the pandemic from closures and social distancing restrictions. Goldman is forecasting a 25.5% decline in sales to $684.7 million.

What about its earnings?

While Goldman is actually ahead of the consensus by 0.9% on its sales estimates, it sits well and truly behind the consensus on its earnings estimates.

The broker doesn’t expect its margins to be as strong as the market is forecasting. It is expecting a net profit of $1,030.2 million for the first half. This will be up 5.3% on the prior corresponding period but is 4.7% lower than the consensus estimate of $1,080.6 million.

It is a similar story for Woolworths’ interim dividend, which Goldman is expecting to come in at 48.8 cents per share. This compares to the consensus estimate of a 54 cents per share interim dividend.

Is the Woolworths share price a buy?

As I mentioned above, as things stand, Goldman Sachs is sitting on the fence with this one. It has a neutral rating and $39.90 price target on Woolworths shares.

This compares to the latest Woolworths share price of $39.54.

More reading

• CV Check (ASX:CV1) share price flat on results update
• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus
• Why the Pure Foods (ASX:PFT) share price popped today
• How to invest in ASX shares in a post-COVID world 
• 5 ways to lose your money forever

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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 Maggie Beer Holdings Ltd (ASX: MBH) share price has had a massive year, jumping up more than 160% in the past 12 months.

Shares in the Maggie Beer Group – which encompasses Maggie Beer products, Paris Creek Farms and Saint David Dairy brands – went up 3.5% yesterday on a positive trading update, but flopped more than 8% in opening trade today. At the time of writing, the Maggie Beer share price has regained some lost ground, now trading at 42 cents, down 1.8%.

Let’s take a closer look at what’s happening.

What did the Maggie Beer quarterly release say?

In yesterday’s release, the company said it had achieved record sales and booming growth across multiple initiatives during the first half of FY21. E-commerce sales increased by 167%, net sales powered up 20%, and the cash position has increased $1.2 million compared to the prior corresponding period.

Commenting on the progress, Maggie Beer Group CEO Chantale Millard said:

It is fantastic for the group to have such a strong start to FY21 and the team have done a tremendous job managing the growth over the past 6 months. We are looking forward to continuing this trend, by supplying premium Australian products to our consumers.

Maggie Beer presently holds a cash balance of $6.3 million following the $1.2 million gain realised in the first half of FY21.

Coles partnership helps along the way

Following the announcement of a partnership with Coles Group Ltd (ASX: COL) last August, the Maggie Beer share price has continued to find its way upward. Coles agreed to launch a range of plant-based meals across approximately 400 Coles locations nationwide.

The day this news was announced, the Maggie Beer share price jumped 23%.

Capitalising on growth opportunities 

According to yesterday’s update, Maggie Beer will continue to focus on growth as we enter 2021. The company’s market cap has reached $86.1 million and the company has roughly 207 million shares outstanding.

Maggie Beer expects its cash holdings to increase further when incoming third quarter payments quarter for the second quarter trading period are received.

Said Ms Millard: “With our strong cash and balance sheet position, we are well-placed to capitalise on our growth opportunities.”

More reading

• Netflix is considering a stock-buyback program
• Why the Botanix (ASX:BOT) share price rocketed 22% to a record high today
• Here’s a fantastic ETF that ASX investors need to know about
• Top brokers name 3 ASX shares to buy today
• Why the Smartpay (ASX:SMP) share price has stormed to an all-time high

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.

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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.

Netflix Inc (NASDAQ: NFLX) shares surged in after-hours trading on Tuesday following the company’s strong fourth-quarter update. Not only did Netflix report better-than-expected revenue and subscribers, but it also said it’s on pace to become sustainably cash flow positive in the near future. Indeed, management is so confident in this outcome that it’s already considering putting some excess cash flow to use in a share-repurchase program.

Here’s a look at the key takeaways from the streaming-giant’s fourth-quarter results.

Netflix Q4 earnings: The raw numbers

Metric	Q4 2020	Q4 2019	Change
Revenue	$6.64 billion	$5.47 billion	21.5%
Earnings per share	$1.19	$1.30	(8%)
Subscribers	203.7 million	167.0 million	21.9%

Source: Netflix fourth-quarter shareholder letter. Table by author.

Netflix’s fourth-quarter revenue rose 22% year over year to $6.64 billion, surpassing analysts’ average estimate for revenue of $6.63 billion. Earnings per share (EPS) of $1.19 was below analysts’ view for $1.30, but the company’s reported earnings-per-share figure notably included a $258 million non-cash charge from currency remeasurement on the company’s euro-denominated debt. Quarterly net income would have been nearly 50% higher without this non-cash unrealized loss.

The quarter was fueled by a 22% year-over-year increase in subscribers. Netflix added 8.51 million paid members during the quarter, well ahead of management’s guidance for 6 million net additions. 

Highlighting Netflix’s incredible momentum for the full year of 2020, the company managed to add a record 37 million new members during the year.

Big cash flow is on the horizon

While Netflix’s financial results and subscriber performance were notable, the star of the quarter was management’s commentary on cash flow: “We believe we are very close to being sustainably [free cash flow] positive. For the full year 2021, we currently anticipate free cash flow will be around break even (vs. our prior expectation for -$1 billion to break even).”

Free cash flow, which is equal to cash generated from operations less capital expenditures, is the cash that a business generates after all operating and investment activity is accounted for. It represents the cash that can be used to pay off debt, repurchase shares, make acquisitions, or even pay dividends.

Netflix has long been known for burning through its cash as it spends heavily on content creation. Big spending on content has led the company to repeatedly turn to debt markets to raise capital. But Netflix’s higher sales and greater economies of scale today mean that those days may be over soon. Management explained:

Combined with our $8.2 billion cash balance and our $750m undrawn credit facility, we believe we no longer have a need to raise external financing for our day-to-day operations. Our 5.375% February 1, 2021 bonds mature in Q1. We plan on repaying the bond at maturity out of cash on hand, as we are currently well above our minimum cash needs.

Even more, the company said it will be exploring the idea of using some of its excess cash to repurchase shares.

Shares of the growth stock soared as much as 13% in after-hours trading on Tuesday as investors applauded Netflix’s improving financial position.

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

More reading

• Netflix has a lot to prove to investors this week
• Netflix just lost nearly 1 billion hours worth of content
• Netflix earnings: 3 trends to watch
• FAANG stocks make their case to lead the Nasdaq in 2021
• The top streaming stocks to buy in 2021

Daniel Sparks 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 Netflix. The Motley Fool Australia has recommended Netflix. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Botanix Pharmaceuticals Ltd (ASX: BOT) share price has been on fire on Wednesday.

At one stage today, the clinical stage synthetic cannabinoid company’s shares were up over 22% to a record high of 16.5 cents.

In afternoon trade the Botanix share price has faded a touch but is still up a sizeable 11% to 15 cents at the time of writing.

Why is the Botanix share price rocketing higher?

Investors have been buying Botanix shares following the release of an announcement this morning.

According to the release, research data from its antimicrobial platform has been published in Nature Research’s peer-reviewed journal, Communications Biology.

The lead author is Dr Mark Blaskovich, Director of the University of Queensland’s Centre for Superbug Solutions in the Institute for Molecular Science. He is joined by Botanix Directors Matt Callahan and Dr Michael Thurn as co-authors.

The company explained that the research represents the culmination of research collaborations involving leading antimicrobial researchers across the world. Furthermore, all research data generated is fully owned by Botanix and is the subject of several patent applications.

What was said about the research?

The release reveals that Communications Biology editors summarised the article as follows:

“Blaskovich et al. demonstrate the antimicrobial applications of cannabidiol in a range of pathogenic bacteria, including MRSA and the capacity to kill the Gram-negative bacteria Neisseria gonorrhoeae. This article highlights the potential for cannabidiol in the age of antimicrobial resistance.”

Botanix President and Executive Chairman, Vince Ippolito, was delighted with the development. He said:

“The published data clearly establishes Botanix as the world leader in characterising and exploiting the pharmaceutical potential of synthetic cannabinoids as antimicrobials – and vast potential for the development of novel and effective treatments. Congratulations to all the collaborators involved in this significant body of research.”

BTX 1801 Phase 2a antimicrobial study update

In addition to this, the company provided an update on its BTX 1801 Phase 2a antimicrobial study.

According to the release, the BTX 1801 antimicrobial clinical study is complete and it is on track to announce data within the first quarter of 2021.

This study aims to test the ability of the nasally applied BTX 1801 ointment to eradicate Staphylococcus aureus (Staph) and methicillin-resistant Staphylococcus aureus (MRSA) from the nose of individuals known to carry these bacteria in their nasal cavity.

Botanix notes that nasal “carriage” of Staph and/or MRSA greatly increases the risks of serious and sometimes life-threatening infections following surgery, as patients essentially infect themselves.

At present, nasal decolonisation is a commonly used method for preventing surgical site infections. However, overuse of the widely available antibiotic Bactroban (also known as mupirocin) has led to a significant increase in the development of bacterial resistance to antibiotics.

The double-blind, vehicle controlled BTX 1801 Phase 2a clinical study has been designed to evaluate the safety and local tolerability of two formulations of BTX 1801 to decolonise Staph and MRSA in the nose of healthy adults.

All eyes will be on the Botanix share price when that data is released.

More reading

• Here’s a fantastic ETF that ASX investors need to know about
• Top brokers name 3 ASX shares to buy today
• Why the Smartpay (ASX:SMP) share price has stormed to an all-time high
• Here’s why 25-bagger Latin Resources (ASX:LRS) is making news today
• Why the Archer Materials (ASX:AXE) share price is 33% higher today

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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It isn’t hard to see why exchange traded funds (ETFs) are becoming very popular with Australian investors.

Through just a single investment, these funds allow investors to invest in a large number of shares.

As well as making diversification easier, it means investors can gain exposure to indices, sectors, or themes that would have been almost impossible to do so 10 years ago.

One popular ETF that ASX investors might want to get better acquainted with is summarised below:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF gives investors the opportunity to invest in some of the biggest and brightest technology and ecommerce companies that have their main area of business in Asia.

BetaShares notes that this funds provides diversified exposure to a high-growth sector that is under-represented in the Australian share market. There are a total of 50 companies included within the ETF.

One of these is Baidu, which is widely regarded as the Chinese version of Google.

As well as being the dominant search engine in China, Baidu has a keen focus on artificial intelligence (AI) and is aiming to be an autonomous vehicle giant. In 2019, the company ranked number one in the amount of AI-related patent applications in China for the second consecutive year.

Another company included in the fund is Alibaba. It is the Amazon of China and at the end of September had 757 million annual active customers.

Across its Alibaba, Taobao, and Tmall brands, the company is estimated to control a sizeable 56% of China’s e-commerce market. It also has a presence offline with a growing network of grocery stores, hypermarkets, and department stores.

A third company of note that you’ll be buying a slice of is Tencent. It is one of the world’s largest tech companies with a focus on video games and social media.

It is best known as the company behind the WeChat app, which is China’s most dominant instant-messaging service and currently has over 1.2 billion active users globally. In addition to this, the app has a virtual duopoly with Alibaba’s Ant Group in the mobile payments industry in the country. Tencent is also a substantial shareholder of Afterpay Ltd (ASX: APT).

The BetaShares Asia Technology Tigers ETF share price is up 63% over the last 12 months.

More reading

• 3 great ASX tech shares to buy
• 2 outstanding ASX ETFs to buy
• 2 ASX ETFs to buy for 2021 and beyond
• US decides against delisting Tencent and other Chinese giants
• 2 quality ETFs for ASX investors in January

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

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:

Baby Bunting Group Ltd (ASX: BBN)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $5.50 price target on this baby products retailer’s shares. The broker suspects that Baby Bunting could outperform expectations in the first half of FY 2021 due to market share gains and its strong online presence. In addition to this, the broker feels it is in a stronger position than its competitors due to its size. This provides it with better quality customer data and strong buying power with suppliers. The Baby Bunting share price is trading at $5.25 this afternoon.

Megaport Ltd (ASX: MP1)

Analysts at UBS have retained their buy rating but trimmed the price target on this global elastic interconnection services provider’s shares to $15.45. This follows the release of its second quarter update earlier this week. Although its ports growth was softer than UBS was expecting, it notes that its overall performance has improved since the first quarter. Furthermore, the broker remains positive on the future and expects the company to benefit greatly from the structural shift to the cloud. The Megaport share price is fetching $12.17 on Wednesday.

Zip Co Ltd (ASX: Z1P)

A note out of Morgans reveals that its analysts have retained their add rating but reduced their price target on this buy now pay later provider’s shares to $7.86. According to the note, the broker has trimmed its FY 2021 estimates to account for softer margins, but lifted its FY 2022 estimates to reflect its belief that its sales will be stronger than previously expected. Morgans believes the buy now pay later industry is well-placed for growth in the current environment. The Zip share price is trading at $5.99 this afternoon.

More reading

• ASX 200 up 0.5%: BHP’s update, PolyNovo jumps, Ansell impresses
• ASX 200 rises 1.2%
• ASX 200 up 1.2%: Bingo rockets, Rio Tinto update, Domino’s jumps
• Why Bathurst Resources, Megaport, Orocobre, & Splitit shares are dropping lower
• Why the Megaport (ASX:MP1) share price is sliding lower 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 MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD 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.

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The Smartpay Holdings Ltd (ASX: SMP) share price is storming higher today following the release of a positive third quarter trading update.

In the first 30 minutes of trade, the payment solutions’ share price reached an all-time high of 90.5 cents. However, the Smartpay share price has since retraced to 88 cents, up 7.3%, at the time of writing.

Smartpay is the largest independently owned and operated EFTPOS provider in both Australia and New Zealand. The company develops innovative point-of-sale (POS) systems for more than 25,000 business customers including banks, retailers and merchants.

How did Smartpay perform?

In today’s release, Smartpay advised it has booked strong growth over the third quarter of FY21, particularly in its Australian segment.

For the period ending December 31, Smartpay delivered total group revenue of NZ$9.2 million for the third-quarter. This reflected a 24% increase on the prior corresponding period (pcp), and 18% lift quarter-on-quarter.

Most notably for the company was its Australian segment performance which drove the overall higher result. Smartpay recorded $5 million in Australian acquiring revenue in the 3 months, representing a 75% jump on the pcp, and 35% gain over the last quarter.

In comparison, New Zealand climbed just 2% higher through the period against the prior 3 months.

Transacting terminals in Australia stood at 5,775, which grew an additional 1,164 units at the end of the third quarter. The surge was attributed to an uptick in lead generation and customer acquisition activities. Also having some positive impact, was the return of some terminals to transacting status following the COVID-19 disruption.

In addition, transaction volumes across the existing network reported robust trading conditions through the holiday season. Merchant partnerships coupled with higher margin products accounted for 70% of Smartpay’s base now using its SmartCharge solution.

About the Smartpay share price

On the back of the sound performance update, the Smartpay share price has reached an all-time high today. Compared to the same time last year, the company’s shares have soared more than 72%.

The Smartpay share price reached a 52-week low of 22 cents in March.

More reading

• Here’s why 25-bagger Latin Resources (ASX:LRS) is making news today
• Why the Archer Materials (ASX:AXE) share price is 33% higher today
• Afterpay and BrainChip were some of the most traded ASX shares last week
• Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders
• Tesla debuts China-made Model Y SUV

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.

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The Latin Resources Ltd (ASX: LRS) share price is making big news today. Latin Resources shares are, at the time of writing, up 3.92% to 5.3 cents a share.

That doesn’t sound all too impressive. But consider that Latin Resources shares are now up 60.6% over just the past 5 days, and up almost 2,550% since its last 52-week low. A 25-bagger! Put simply, this is a company that would have made some investors extremely happy over the past 12 months.

So what’s going on here? Why is this company exploding in value this week?

Who is Latin Resources?

Latin Resources is a mineral exploration company. It owns several projects across both Australia and Latin America. These include a gold project in NSW, a copper project in Peru and a lithium opportunity in Argentina as well as Brazil.

It’s some of these projects which have spurred the rapid price appreciation we have seen in Latin Resources shares over the past few months in particular.

Back in early November, for instance, the company told investors it had acquired a new exploration license in the NSW Lachlan Ford Belt, very close to Newcrest Mining Limited‘s (ASX: NCM) world-class and highly valued Cadia mine. That announcement precipitated a surge of interest in Latin Resources shares.

But that project isn’t why Latin Resources is in the news today.

The Kaolin master

Back in late November, Latin Resources told investors that it had started ‘air-core drilling’ at its Noombenberry Halloysite-Kaolin project in Western Australia. The drilling was designed to “outline the extent of a known sub-outcrop of kaolinitic clays and halloysite” at the site.

Kaolin and halloysite are both materials best described as clays. Kaolin is used as the primary ingredient in the manufacture of porcelain and fine china. Halloysite can also be used for this purpose. Although it has more industrial applications, most prevalently in the refining of petroleum.

Yesterday morning, Latin Resources told investors that this drilling has been completed, and has resulted in the discovery of significant deposits of “bright, white” kaolin clay “up to 50m thick” across the 18sqkm area.

Samples are now being sent to “laboratories in Perth and Adelaide” for further testing.

Latin Resources exploration manager Tony Greenaway had this to say on the news:

Our initial observations from drill cutting are very encouraging… [and] will bode well for any potential future development. We are now able to significantly advance the Noombenberry project to the next stage…

The whole team at Latin Resources is very excited by our initial observation at Noombenberry, and the potential that this emerging project is showing at such an early stage.

More reading

• Top broker says you should buy these oversold ASX gold stocks now
• Here’s why the Newcrest (ASX:NCM) share price is underperforming
• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining Limited. 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 Archer Materials Ltd (ASX: AXE) share price is on the march today after the company released an announcement pertaining to its quantum computing chip.

Following today’s 33% gain, the Archer share price has now returned over 238% in the past year. For comparison, the S&P/ASX 200 Index (ASX: XJO) has slipped 4.1% over the same period.

Why is the Archer Materials share price moving higher?

This morning Archer Materials updated the market regarding the granting of its first patent for the company’s 12CQ quantum computing chip. More specifically, the patent granted is a Japanese patent (No. 6809670) for the protection of intellectual property of the 12CQ chip.

In the update, Archer noted the patent gives access to the high-value Japanese market for the 12CQ chip.

Considering the stringency of the world’s largest patent office, Archer also believes that further patent application processes will now be streamlined. These future patent applications include the jurisdictions of Australia, South Korea, Hong Kong, China, Europe, and the United States.

Quantum computing is an emerging technology, mostly restricted to research and development. Existing limitations of scale, temperature and pressure requirements have long impeded the application of quantum computing at a consumer level.

Archer aims to build quantum computing that is operational at room temperature, thereby making the technology adoptable by a wider addressable market.

CEO commentary on the update

Archer CEO Dr Mohammad Choucair commented on the news, stating:

Archer’s quantum computing chip IP is now well protected in Japan – a major global economy and centre for technological innovation. The grant of a patent in Japan further validates, and substantially derisks, our unique technology.

This update comes only a month after Archer announced it was partnering with the Brisbane based artificial intelligence (AI) firm Max Kelsen.

Archer Materials trying to knock on Google’s door

Real-world problems are being solved more and more with the application of quantum computing. Last week, it was published that Google’s quantum AI division was working alongside a pharmaceutical company to facilitate the development of new drugs.

Google’s quantum computing division will help develop new drugs https://t.co/BZ9yS5yT0V pic.twitter.com/t9B37TrvHo

— Engadget (@engadget) January 11, 2021

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

For now, most applications involve utilising quantum computing as a service. Companies that currently offer such a service include IBM, Google, Amazon, and Microsoft. However, much like the original computer, there are companies working on making this technology accessible to the everyday consumer. The question is, will we see the the consumer value unlocked in this case, as we did in the era of PC’s by Microsoft and Apple?

Following today’s rally in the Archer materials share price, the company now has a market capitalisation of around $118 million.

More reading

• Why the Archer Materials (ASX:AXE) share price is up 2% today

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Mitchell Lawler owns shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Microsoft and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. 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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