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The BrainChip Holdings Ltd (ASX: BRN) share price is heading south today despite no new announcements from the company.

At the time of writing, the artificial intelligence (AI) technology company’s shares are down 4.11% to 88.7 cents.

Why are BrainChip shares treading lower today?

Investors are offloading the BrainChip share price following a fall across the S&P/ASX All Technology Index (ASX: XTX).

After the United States-based Nasdaq shed 0.81% overnight, the Aussie tech sector is in sync with a 1.25% decline today.

Last week, the All Ordinaries Index (ASX: XAO) achieved some notable gains on the back of a positive economic outlook.

The United States Federal Reserve predicted that its economy will narrowly avoid a recession in 2022 and 2023.

This led to a strong rebound across global markets and a sharp turnaround from the induced selling by investors beforehand.

It’s also worth mentioning that BrainChip is set to wrap up its second quarter of the 2022 financial year.

These results are expected to be released towards the back end of next month.

The pending update could provide more insight regarding the company’s pathway to the commercialisation of its Akida neuromorphic platform.

Investors should keep a close eye on this.

BrainChip share price snapshot

While the BrainChip share price has tumbled 18% in a month, investors would be pleased with its long-term performance.

Year-to-date, the company’s shares are up 30% and further stretch to 70% when looking at the past 12 months.

Based on today’s price, BrainChip presides a market capitalisation of around $1.59 billion.

The post Why is the BrainChip share price sliding 4% today? appeared first on The Motley Fool Australia.

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More reading

• Why is the BrainChip share price gaining 5% on Friday?
• How has the BrainChip share price performed since joining the ASX 200?
• Why did the BrainChip share price spike 7% this morning?
• 5 things to watch on the ASX 200 on Monday
• 3 ASX All Ordinaries shares that leapt more than 10% on Thursday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Northern Star Resources Ltd (ASX:NST) share price is charging higher today.

At the time of writing, the gold miner is trading at $7.41 apiece, a more than 5% gain on the previous session.

In broad market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is also up 3% today.

What’s up with the Northern Star share price?

Investors are bidding up the Northern Star share price amid a company announcement on its KCGM Mill optimisation pre-feasibility study (PFS).

The KCGM Super Pit is one of the world’s largest and most significant gold mines, the release says. It has a mineral resource of 27.4 Moz and an ore reserve of 11.9 Moz. It is located in Kalgoorlie, Western Australia.

Northern Star acquired 50% of KCGM on 3 January 2020. It then assumed 100% control of the asset following the merger with Saracen Mineral Holdings Ltd back on 12 February 2021.

Since then, the company says it has further understood the resource base. As a result, it presented 3 mill expansion options that were evaluated in the KCGM mill optimisation PFS.

“All three mill expansion options are financially compelling (post tax) and deliver meaningful operational benefits,” the release noted.

Management commentary

Commenting on the update, Northern Star Managing Director, Stuart Tonkin said:

The PFS outcome confirms the enormous opportunity on offer at KCGM, a truly world-class gold asset. Since we moved to 100% ownership of KCGM a little over a year ago, we have diligently and efficiently worked through potential options to create further value for all stakeholders.

We believe Northern Star’s powerful combination of continued operational excellence, the strongest asset portfolio in our history and a commitment to deliver social value, will enable us to provide attractive returns and long-term value growth.

The update contrasts with Evolution Mining Ltd (ASX: EVN)’s full-year production guidance downgrade this week.

The post Own Northern Star shares? Here are the ‘financially compelling’ options vying over $1 billion appeared first on The Motley Fool Australia.

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More reading

• Why BlueBet, Collins Foods, Northern Star, and Tassal shares are charging higher
• Why is the Northern Star share price sinking 9% today?
• 5 things to watch on the ASX 200 on Monday
• The Northern Star share price has lost 7% so far this week. What’s happening?
• Stagflation and gold: Could it be an ideal match for ASX 200 gold miners?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of writing, the benchmark index is up 0.7% to 6,751.5 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Appen Ltd (ASX: APX)

The Appen share price is down 7% to $5.92. This follows broad weakness in the tech sector following a poor night of trade on the tech-focused Nasdaq index. The selling in the sector today has led to the S&P ASX All Technology index dropping 1.3% at the time of writing.

BWX Ltd (ASX: BWX)

The BWX share price has crashed 41% to 69 cents. This follows the launch of a fully underwritten $23.2 million capital raising at a whopping 48.7% discount of 60 cents per share. In addition, the personal care products company downgraded its earnings guidance materially for FY 2022 due to challenging retail conditions. That’s despite its most recent guidance update being made last month.

Imugene Limited (ASX: IMU)

The Imugene share price is down over 10% to 21.5 cents. This decline appears to have been driven by profit taking after some very strong gains by the immuno-oncology company’s shares Monday. Investors were bidding Imugene’s shares higher following the release of promising study results.

Wesfarmers Ltd (ASX: WES)

The Wesfarmers share price is down 2.5% to $43.04. Wesfarmers and a number of retailers have come under pressure today after a leading broker downgraded their shares due to concerns over a softer consumer demand backdrop. In respect to Wesfarmers, analysts at Ord Minnett downgraded the company’s shares to a lighten rating with a $41.20 price target.

The post Why Appen, BWX, Imugene, and Wesfarmers shares are dropping appeared first on The Motley Fool Australia.

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More reading

• Down 7%, what’s impacting the Appen share price today?
• Wesfarmers share price tumbles on broker downgrade
• ASX 200 midday update: Tech shares tumble, Collins Foods jumps
• BWX share price sinks 38% following capital raising at dizzying discount
• Here are the 3 most heavily traded ASX 200 shares on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended BWX Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Appen Ltd (ASX: APX) share price is lagging the market on Tuesday despite the company’s silence.

However, it’s not alone in its suffering. The former S&P/ASX 200 Index (ASX: XJO) stock is joined in the red by many of its fellow tech shares.

At the time of writing, the Appen share price is $5.91, 7.22% lower than its previous market close.

For context, the ASX 200 is currently up 0.61% while the All Ordinaries Index (ASX: XAO) has gained 0.62%.

Let’s take a closer look at what’s going on with Appen and its peers today.

What’s pushing the Appen share price down?

The Appen share price is suffering alongside many of the market’s best-known tech stocks today.

It follows on from a grim Monday on Wall Street that saw the tech-heavy Nasdaq Composite slip 0.72%.

The S&P 500 also slid 0.3% while the Dow Jones Industrial Average fell 0.2% overnight.

Following in Wall Street’s footsteps, the S&P/ASX 200 Information Technology Index (ASX: XIJ) is down 0.8% right now.

That makes it the second-worst performing sector behind the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ).

It’s not just ASX 200 tech shares struggling on Tuesday. The broader tech sector is falling, with the S&P/ASX All Technology Index (ASX: XTX) exhibiting a 1.23% slump.

The ASX 200 tech sector is being dragged down by shares in Life360 Inc (ASX: 360), EML Payments Ltd (ASX: EML), and Megaport Ltd (ASX: MP1). They’ve slipped 6.4%, 5.8%, and 6% respectively.

ASX 200 tech favourites Novonix Ltd (ASX: NVX) and Block Inc (ASX: SQ2) are also down 5.8% and 3.9% respectively right now.

Today marks a major reversal for the Appen share price. It posted a 13% gain over the three previous sessions.

It’s also 12% higher than it was before it was dumped from the ASX 200 last Monday.

The post Down 7%, what’s impacting the Appen share price today? appeared first on The Motley Fool Australia.

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More reading

• Why Appen, BWX, Imugene, and Wesfarmers shares are dropping
• Why ASX 200 tech shares are outperforming the market on Friday
• Why Appen, Infomedia, PointsBet, and Vicinity shares are storming higher
• 3 ASX All Ordinaries shares having a cracking Monday
• Appen share price jumps 10% despite ASX 200 exit: What’s going on?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd, Block, Inc., EML Payments, Life360, Inc., and MEGAPORT FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. and EML Payments. 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 Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing, the benchmark index is up 0.6% to 6,746.4 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are charging higher:

Bluebet Holdings Ltd (ASX: BBT)

The BlueBet share price has jumped 19% to 56 cents. The catalyst for this is news that BlueBet has signed a 10-year market access agreement with Caesars Entertainment to operate a new online sportsbook in Indiana. This provides BlueBet with a big market opportunity. There are ~6.8 million people living in the state and $4.5 billion in wagering handle was generated during the last 12 months.

Collins Foods Ltd (ASX: CKF)

The Collins Foods share price is up 11% to $9.92. Investors have been buying this KFC restaurant operator’s shares following the release of its FY 2022 results. For the 12 months ended 1 May, Collins Foods delivered an 11.1% increase in revenue to $1,184,5 million and a 25% jump in underlying net profit after tax to $59.7 million. This was driven by growth across the business.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is up 6% to $7.44. This morning this gold miner provided an update on its KCGM mill optimisation pre-feasibility study. That update reveals that the study was a success with Northern Star identifying an opportunity to deliver higher-margin ounces at improved capital efficiency.

Tassal Group Limited (ASX: TGR)

The Tassal share price is up 13% to $4.50. This follows news that the seafood producer has received a takeover approach. According to the release, fellow seafood company Cooke Inc has tabled a $4.85 cash per share offer. The Canada-based rival’s offer values Tassal at approximately $1 billion. However, management isn’t biting. It believes the offer doesn’t reflect the fundamental value of the business, nor is it in the best interests of shareholders.

The post Why BlueBet, Collins Foods, Northern Star, and Tassal shares are charging higher appeared first on The Motley Fool Australia.

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More reading

• Why is the BlueBet share price rocketing 16% today?
• ASX 200 midday update: Tech shares tumble, Collins Foods jumps
• Tassal share price rockets 14% on $1 billion takeover bid
• Collins Foods share price jumps 11% on FY22 results
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor James Mickleboro has positions in Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Collins Foods Limited. The Motley Fool Australia has recommended BlueBet Holdings Ltd and Collins Foods Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There’s some big news in the ASX telecommunications space today. It hasn’t come from any of the S&P/ASX 200 Index (ASX: XJO) telcos though. That includes Telstra Corporation Ltd (ASX: TLS) or TPG Telecom Ltd (ASX: TPG). Instead, it’s come from Optus.

Despite its long presence in the Australian telco market, Optus is not an ASX share nor an Australian company. Instead, it is a fully owned subsidiary of Singapore Communications Limited (Singtel).

This morning, Optus put out a press release calling on the Australian Competition and Consumer Commission (ACCC) to reconsider the deal between Telstra and TPG. Back in February, the two telcos announced a “ten-year regional Multi-Operator Core Network (MOCN) commercial agreement”.

This will see TPG gain access to approximately 3,700 of Telstra’s mobile network assets. This will, in turn, boost TPG’s current 4G coverage from 96% to 98.8% of the Australian population.

In return, Telstra will receive access to TPG’s spectrum across both 4G and 5G.

It’s this agreement Optus is reacting to today.

Optus calls on ACCC to pull Telstra deal

In its statement, the telco argues that “it is important the ACCC rejects the merger authorisation”.

It went on to say that “TPG/Telstra’s proposed merger will cause regional Australians to suffer less investment, higher prices and less resilient communities”.

Here’s some more of what Optus said in its statement:

If the proposed transaction proceeds, the market structure will be more acutely characterised by a monopoly provider [Telstra].

This will lead to a loss of competition and material consumer and public detriment … [and] will undermine the commercial viability of additional investment in regional infrastructure (which TPG is abandoning) by any rational company, ‘locking’ competition out of the regional market and eliminating choice in regional Australia.

The proposed network merger will not improve community or customer outcomes. If approved, it will have major adverse and irreversible consequences for the communications sector and ordinary Australians, especially those living in our regions.

The strongly-worded statement has had no impact on ASX 200 telco shares today.

At the time of writing, the Telstra share price is up 0.25% to $3.94.

TPG shares are also in the green, up 0.24% so far today at $6.17 a share.

Clearly, ASX investors aren’t too worried about the Optus protest today.

The post Optus plea to ACCC doing little to these ASX 200 telco shares today appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Tech shares tumble, Collins Foods jumps
• Looking to buy ASX dividend shares? Here are 2 that experts rate highly
• ‘Always peaks and troughs’: Fundie names when ASX shares will stabilise
• 5 things to watch on the ASX 200 on Tuesday
• ‘Don’t get too bearish’: 3 ASX shares Wilsons just added

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX 200 buy now, pay later (BNPL) services are outgrowing the growth in credit cards for young consumers, a new report has found.

The report, published by the Australia Institute, also claims large tech and payment platforms have a strong influence on the Australian market and that BNPL provides a healthy level of competition.

It’s worth noting the report was commissioned by BNPL provider Afterpay. Let’s take a closer look.

BNPL shares crucial for competition

According to the discussion paper, “…innovation in the BNPL market is…disrupting the competitive dynamics in the consumer transaction [and customer acquisition] market”.

Economist Richard Denniss, who wrote the paper alongside Matt Saunders, argues that competition between BNPL providers means their products are all slightly different.

The paper demonstrates that the BNPL business model differs from that of credit card companies – a comparable industry.

It notes that the BNPL sector sources its revenue from merchant fees – approximately 4% on each sale – versus interest rates and late fees “that underpin the profitability of credit cards”.

According to the discussion paper, “[Block Inc (ASX: SQ2)], for example, receives just under 4% of the sales revenues from merchants who source their customers from their platform”.

It continues:

Credit card providers offer a cross subsidy between the large number of customers who carry debt on their high interest credit cards and the small proportion of customers who pay off their entire balance each month to avail themselves of the ‘interest free’ periods offered on some cards.

Contrastingly, BNPL providers typically rely on merchants’ willingness to pay for a low cost customer acquisition service that gives them improved access to a growing cohort of consumers who prefer zero or low cost transaction and instalment services to credit cards.

Customer acquisition will benefit too

This underlines the second part of the paper’s thesis: customer acquisition.

ASX 200 BNPL companies are similar to companies like Google and Facebook, the paper argues, in that they help merchants to find potential customers.

As a result, BNPL companies such as Block, Zip Co Ltd (ASX: ZIP), and Laybuy Group Holdings Ltd (ASX: LBY) are in direct competition with the large tech platforms like Google and Facebook, as well as large payments providers like Visa and Mastercard.

The discussion paper found:

Google and Facebook receive over 80% of online advertising revenue in Australia and Visa and Mastercard are responsible for 90% of the value of all credit card transactions in Australia.

A highly competitive customer acquisition market offering a diverse range of services and pricing structures will help to enhance competition in retail markets more generally.

This could have benefits to pricing and product selection, the paper also suggested.

Nevertheless, for investors, the ASX 200 BNPL sector has some way to go before reclaiming its losses of 2022. LayBuy Group, for example, is down more than 92% in the last 12 months, while Zip is down almost 94% in that time.

The post Why this economist believes ASX 200 BNPL shares are key to keeping the market competitive appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• Zip share price bucks the trend with 5% fall. What’s happening?
• Why Evolution, Newcrest, OZ Minerals, and Zip shares are dropping today
• These are the 10 most shorted ASX shares
• Here are the top 10 ASX shares today

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) energy shares are enjoying positive gains on the market today.

Woodside Energy Group Ltd (ASX: WDS) Santos Ltd (ASX: STO) and Beach Energy Ltd (ASX: BPT) are among the energy shares on the rise.

So what is fuelling these share price increases today?

Supply disruptions

The Woodside Energy share price is rising 3% today, while Santos shares are up 2.71%. Beach Energy shares are jumping 5.46%, while the S&P/ASX 200 Energy Index (ASX: XEJ) is leaping 3.08%.

These ASX 200 energy shares are all major producers of oil. Rising oil prices appear to be weighing on the minds of investors.

WTI crude oil futures jumped for the third session in a row in global markets, Bloomberg reported. The publication noted that Libya’s oil exports are facing disruptions due to a political crisis, while oil production in Ecuador is at risk due to protests.

Meanwhile, the Group of Seven (G7) nations are considering a cap on the price of Russian oil as part of their pledge to stand with the Ukraine, Reuters reported.

Discussing this move, Commonwealth Bank analyst Vivek Dhar told the publication there is “nothing stopping Russia from banning oil and refined product exports to G7 economies in response to a price cap, exacerbating shortage conditions in global oil and refined product markets”.

WTI Crude Oil is up 1.04% to US$110.71 a barrel, while Brent Crude Oil is rising 1.08% to US$116.33 a barrel, according to Bloomberg.

Share price snapshot

The Woodside share price has soared 43% in a year, while the Santos share price has leapt 4%. The Beach Energy share price has surged nearly 35% in a year.

For comparison, the S&P/ASX 200 Energy Index (ASX: XEJ) has rocketed nearly 26% in the past year.

The post ASX 200 energy shares are having a ball today, what’s fuelling it? appeared first on The Motley Fool Australia.

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More reading

• Here’s why the Woodside Energy share price is green all over today
• 5 things to watch on the ASX 200 on Tuesday
• What fuelled the Beach Energy share price 4% higher today?
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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

Mega-cap public companies have gotten unbelievably large in the past few years. Some of the technology giants like Apple and Microsoft have gotten so large that their market capitalizations — the total value of their publicly traded shares — are now north of $1 trillion. Only six publicly traded companies in the United States have ever joined the exclusive $1 trillion market cap club. But what company will be the next to join? I think a good candidate is Nvidia (NASDAQ: NVDA), the maker of computer chips for gamers, cryptocurrencies, data centers, and many other technologies. 

Nvidia’s market cap is currently around $400 billion. Can it join the ranks of companies valued at $1 trillion, or more than double its current price, by 2025? Let’s investigate. 

Recent growth has been fantastic

To take a look at Nvidia’s prospects to reach the $1 trillion club, we first need to look at its financials and growth. In its latest quarter, revenue hit $8.29 billion, up 46% year-over-year, and free cash flow hit $1.37 billion. Nvidia is currently seeing super-strong growth for its data center business, which grew revenue by 83% year-over-year to $3.75 billion. Gaming revenue, Nvidia’s other large operating segment, is seeing solid growth as well, with revenue hitting $3.62 billion in the quarter, up 31% year-over-year.

And there’s reason to be optimistic about both segments continuing to grow over the long term. Video games and associated technologies are growing steadily each and every year, and data center build-outs continue to happen in order for companies to build out cloud computing infrastructure. There should also be continued growth in machine learning and artificial intelligence (AI) research. Nvidia’s various computing products are the market leaders for these industries. 

Watch out for short-term headwinds

There’s one thing Nvidia investors should be concerned with, at least in the short run, and that is cryptocurrencies. Long story short, cryptocurrency companies and miners use Nvidia’s computing products to run their businesses. With the crypto markets crashing, these companies are starting to sell their Nvidia products, sometimes for prices well below retail. This increase in the supply of used products has the chance to decrease demand for new Nvidia products coming down the manufacturing line, which would hurt Nvidia’s top-line revenue growth.

Regardless of whether or not Nvidia gets hit by cryptocurrency demands, the long-term growth drivers for the business remain intact. People are playing more video games, businesses are building out more data centers, and researchers are building out more and more AI technologies. All bode well for the demand for Nvidia’s products in the future. 

So will it join the $1 trillion club?

In order to reach a market cap of $1 trillion, Nvidia will need to significantly increase its annual free cash flow generation. Based on a price-to-free cash flow multiple (P/FCF) of 25, which is above the market average right now, a stock worth $1 trillion needs to generate $40 billion in annual free cash flow ($1 trillion divided by 25). For reference, of the four U.S. companies valued at over $1 trillion (Apple, Alphabet, Microsoft, and Amazon), all except Amazon have generated over $60 billion in free cash flow in the last 12 months. Amazon’s free cash flow is negative due to a lot of heavy investments it has made since the start of the pandemic, but should recover to above $40 billion in the next couple of years.

NVDA Free Cash Flow data by YCharts

As you can see in the above chart, Nvidia generated just under $8 billion in free cash flow over the last 12 months. In order to hit $40 billion by the end of 2025, the company needs to grow its free cash flow by 50% a year for four straight years. While certainly possible, it doesn’t seem probable for a company of this magnitude to grow that fast. Of course, the stock could hit $1 trillion with pure multiple expansion, but investors shouldn’t be banking on that happening, especially as we enter a bear market.

Given the tailwinds around computing, AI, and data centers, Nvidia is on a path to eventually join the $1 trillion market cap club. But to do so by the end of 2025 seems unlikely. 

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

The post Will Nvidia be a trillion-dollar stock by 2025? appeared first on The Motley Fool Australia.

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

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

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The BHP Group Ltd (ASX: BHP) share price is enjoying a healthy lift today, up 2.5% to $42.22 per share.

That will come as welcome news to shareholders of the S&P/ASX 200 Index (ASX: XJO) iron ore giant, who’ve watched the BHP share price decline 21% since mid-April.

And there could be more good news to come in the short-term, according to Jessica Amir, Australian market strategist at Saxo Markets.

Why does the BHP share price appear set for a lift?

Amir notes that the BHP share price has come under pressure since April “as China’s lockdown has ground down industrial metals demand and prices in iron and copper”.

However, she said that this week BHP shares could march higher for three reasons.

First, it’s the end of the financial year in Australia, with the BHP share price well down year-on-year. For that reason, Amir said, “We may likely see fund managers top up BHP positions as it’s the largest commodity stock in the world and the biggest stock on the ASX.”

Next, Amir said, “The technical indicators suggest BHP shares could rally as it’s in oversold territory.”

What other tailwinds could lift the ASX 200 miner?

The third reason she said the BHP share price could continue to gain over the short-term is due to apparent success with China’s battle to contain its COVID outbreaks:

Sentiment picked up in China after it declared victory over Shanghai’s Covid outbreak. This resulted in the iron ore price jumping 3.7% yesterday, and the technical indicators suggest buying may continue in the short-term. Meanwhile, the copper price jumped for the first time in five days.

Over the medium term, Amir is more cautious on the outlook for the BHP share price, noting that, “The industrial metal commodity rally could be short lived, until we have consistent news from China that restrictions are easing.”

BHP’s financial year ends this week.

Looking ahead Amir said, “We await their operational review due 19 July, which will probably give a dimmer outlook on commodity demand. BHP’s financial results are due 16 August.”

The post Why the BHP share price looks poised for a short-term boost: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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