BrainChip (ASX: BRN) share price rockets 16% on Megachips deal

The Californian machine learning developer signs a partnership with a massive Japanese technology company.

| More on:
a man looks down at his phone with a look of happy surprise on his face as though he is thrilled with good news.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares for technology company BrainChip Holdings Ltd (ASX: BRN) have rocketed up almost 16% on Monday. 

The stock was going for 62.5 cents mid-afternoon, which was 15.74% higher than Friday's closing price of 54 cents.

The likely trigger for the investor fervour was this morning's announcement that US$111 billion Japanese firm MegaChips Corporation (TYO: 6875) has partnered with BrainChip.

"The 4-year agreement provides MegaChips with an intellectual property license for use in designing and manufacturing BrainChip's Akida technology into external customers' system-on-chip designs," BrainChip announced to the ASX.

"In exchange for the IP and certain engineering services, BrainChip will receive an upfront license fee and additional payments over the term of the agreement."

'Exciting collaboration'

BrainChip, a Californian business, develops chips and software that it claims learn autonomously, like the human brain.

According to BrainChip sales and marketing vice president Rob Telson, adding BrainChip's Akida technology onto MegaChips' creations would "deliver a cascading array of benefits to cutting-edge products".

"That not only [ensures] power efficiency without compromising outcomes but can run autonomously for incremental learning without the need to go back and forth to the cloud," he said.

"This is an exciting collaboration from both a business perspective as well as from an industry-altering aspect."

BrainChip shares on a tear recently

Shares for BrainChip have gone gangbusters the last few weeks.

The stock closed 6 October at 37 cents but in the month-and-a-half since then, it has risen by almost 69%.

A series of announcements regarding product development milestones, patents and new orders have spurred on the shares.

In fact, last month, the ASX sent the machine learning developer a "speeding ticket" enquiry after seeing the stock burst upwards.

The company posted a reply that "a reasonable person" would not expect its patent announcements to materially impact the share price, even though they did.

Motley Fool contributor Tony Yoo owns shares of Brainchip Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

More on Share Gainers

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing end to the trading week for investors this Friday.

Read more »

A young boy points and smiles as he eats fried chicken.
Share Gainers

3 ASX All Ords shares smashing the benchmark this week

Investors are sending these three ASX All Ords shares rocketing 18% to more than 29% this week. But why?

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Alliance Aviation, BHP, Boss Energy, and Orthocell shares are racing higher

These shares are ending the week on a positive note. But why?

Read more »

Man with backpack spreading his arms out and soaking in the sun.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing session for investors today.

Read more »

Hands reaching high for a trophy with a sunset in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a nervous hump day session for ASX investors today.

Read more »

Woman with an amazed expression has her hands and arms out with a laptop in front of her.
Share Gainers

Why Collins Foods, DroneShield, Star Entertainment, and Virgin Australia shares are charging higher

These shares are having a good time on hump day. But why?

Read more »

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors enjoyed a strong recovery day this Tuesday.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Gainers

CBA shares hit another all-time high. Can they surpass $200 in 2025?

CBA shares have a tailwind pushing up their price that has nothing directly to do with the bank's business performance.

Read more »