Why did the Brainchip share price surge 12% in May?

It was certainly not all smooth sailing for the AI hardware developer though.

| 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

Key points

  • Brainchip shares soared 12% during May
  • It came amid momentum for artificial intelligence (AI) stocks, driven by US chip developer Nvidia's latest guidance
  • However, Brainchip shareholders sold down shares on the day of the company's AGM

The Brainchip Holdings Ltd (ASX: BRN) share price had a roller coaster ride during the month of May.

Brainchip shares gained 12% in May, rising from 40.5 cents at market close on 28 April to 45.5 cents on 31 May. In contrast, the S&P/ASX 200 (ASX: XJO) share price slid nearly 3% during the month.

So what impacted the Brainchip share price in May?

Rollercoaster ride

Shares in the artificial intelligence (AI) hardware company soared 24% between market close on 17 May and 22 May. But they tumbled back to earth, losing nearly 18% on 23 May. The company's share price then bounced back nearly 10% from market close on 23 May to 31 May.

Momentum in the AI sector may have provided Brainchip shares with a boost in May.

Brainchip is aiming to commercialise its Akida neuromorphic processor to perform artificial intelligence computing solutions.

In the US, AI chip developer Nvidia Corporation (NASDAQ: NVDA) stormed ahead in late May following the release of its second-quarter revenue guidance.

This may have boosted Australian AI shares, such as Brainchip.

However, Brainchip shares crashed on 23 May, the day of the company's annual general meeting presentation.

Commenting at the AGM, Brainchip chairman Antonio J. Viana said:

Let me be clear, nobody at BrainChip is happy or content with our current position. We haven't hit any significant stride yet with respect to revenue.

The trick for many companies comes when the move from technology to product takes place. In the past, BrainChip frankly hasn't gotten this right. We haven't had a product that can see its way into end production systems.

More than 50% of shareholders voting at the meeting voted against the company's remuneration report.

Share price snapshot

The Brainchip share price has shed nearly 60% in the past 12 months.

Created with Highcharts 11.4.3BrainChip PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

This ASX technology share has a market capitalisation of nearly $737 million based on the latest share price.

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 positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. 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 man holds his head in his hands, despairing at the bad result he's reading on his computer.
Technology Shares

DroneShield shares sink 7% despite big news

Let's see what's going on with this market darling on Thursday.

Read more »

A man activates an arrow shooting up into a cloud sign on his iPad.
Technology Shares

Up 25% since April, is it too late to buy Xero shares today?

A leading expert gives his verdict on the growth outlook for Xero shares.

Read more »

Man looking at digital holograms of graphs, charts, and data.
Technology Shares

2 amazing ASX tech shares I wish I'd bought last year

These tech companies are among the world’s best companies.

Read more »

A man in a business suit and tie places three wooden blocks with the numbers 1, 2, and 3 on them on top of each other.
Broker Notes

3 reasons to buy this booming ASX All Ords tech stock today

A leading broker forecasts more gains to come from this surging ASX All Ords tech stock.

Read more »

Man ponders a receipt as he looks at his laptop.
Technology Shares

Brokers rerate 3 leading ASX 200 tech stocks

Experts reveal their ratings on the ASX 200 tech sector's three biggest companies.

Read more »

Hologram of a man next to a human robot, symbolising artificial intelligence.
AI Stocks

Why Macquarie forecasts a big rebound for these 2 quality ASX All Ords tech stocks

Macquarie expects a big rebound is coming for these AI linked, ASX All Ords tech stocks.

Read more »

A young man goes over his finances and investment portfolio at home.
Technology Shares

Is it too late to buy DroneShield shares?

This high-flying stock is up 90% since this time last month. Where next? Let's find out.

Read more »

A frustrated male investor frowns with his hands and arms open asking why the share price has dropped today.
Technology Shares

Why this high-flying ASX 200 tech stock just got downgraded

Let's see which stock has been hit with a downgrade today.

Read more »