Why did the BrainChip share price slump today?

Shares of the artificial intelligence tech company had a tough Tuesday on the market.

| More on:
a man sits at a computer in deep thought with hand on chin in a darkened room as though it is late and night and he is working on cybersecurity issues.

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

sdf

Key points

  • BrainChip shares closed 4.48% lower to 96 cents on Tuesday
  • The company hasn't made any announcements, however, investor fears about aggressive interest rate hikes may have dragged down the share price
  • US Fed chair Jerome Powell is due to speak at the central bank's annual Jackson Hole economic symposium on Friday

The BrainChip Holdings Ltd (ASX: BRN) share price closed lower on Tuesday despite no company announcements.

The artificial intelligence (AI) technology company's shares finished the day down 4.48% to 96 cents each.

In comparison, the S&P/ASX 200 Index (ASX: XJO) also closed lower by 1.21% to 6,961.8 points.

Let's take a look at what may have been weighing on BrainChip shares today.

What's happening to BrainChip shares on Tuesday?

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

After the US-based tech-heavy Nasdaq shed 2.66 % overnight, the Aussie tech sector closed 0.87% lower today.

It appears that Wall Street's summer rally is becoming a distant memory. It seems investor fears are re-surfacing about an aggressive rate hike by the US Federal Reserve.

All ears will be tuned in this Friday when Fed chair Jerome Powell speaks at the central bank's annual Jackson Hole economic symposium.

While the Fed Reserve will look at keeping inflation under control, the pace of its monetary tightening policy will be the key question.

Ultimately, what happens at the two-day event will affect global markets.

On a different note, political tensions between the US and China over the Taiwan issue don't seem to be cooling down just yet.

Earlier today, Taiwan said it would defend itself if attacked. This could draw in the US as both nations have a security partnership in place.

If conflict did break out, this would have massive ramifications for the Taiwan Semiconductor Manufacturing Co. (TSM). The company is the world's most important chip developer and produces more than 90% of advanced chips globally.

This is no doubt a factor in why the US is hoping to maintain Taiwan's status quo.

BrainChip share price snapshot

Despite falling 13% this week, the BrainChip share price has doubled in value over the last 12 months.

Year-to-date, the share is up 42%.

Based on today's price, BrainChip commands a market capitalisation of around $1.66 billion.

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.

More on Technology Shares

A woman holds a glowing, sparking, technological representation of a planet in her hand.
Technology Shares

These ASX tech shares could be set for a big year

Analysts have good things to say about these top stocks.

Read more »

A group of six work colleagues gather around a computer in an office situation and discuss something on the screen as one man points and others look on with interest
Technology Shares

3 amazing ASX 200 tech shares to buy before it's too late

Analysts are feeling bullish about these names. Let's find out why.

Read more »

Man on his laptop standing next to data centres.
Technology Shares

Can NextDC capitalise on South East Asia's data centre boom?

NextDC’s recent Malaysian contract win represents a significant milestone for the data centre company.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Can Codan shares hit $20 this year?

How high can this tech share fly?

Read more »

Happy man working on his laptop.
Technology Shares

Can Xero shares surpass $200 in 2025?

Let's see what analysts are saying about this market darling.

Read more »

A player pounces on the ball in the scoring zone of the field.
Technology Shares

Why this ASX sports tech share looks like a winner

Catapult Group has been delivering outstanding returns for investors. Will the winning streak continue?

Read more »

A woman smiles as she sits on the bus using her phone and listening to music through headphones.
Technology Shares

Why this top fund manager thinks this ASX tech share can continue rising

Investors can be excited about this stock.

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Broker Notes

Macquarie tips 28% upside for this ASX All Ords tech stock

Let's see what the broker is saying about this growth stock.

Read more »