Brainchip Holdings Ltd (ASX: BRN) shares are trading relatively flat today after releasing its quarterly trading update.
It’s been a volatile ride for shareholders over the past nine months. Brainchip’s shares went from around 10 cents to nearly $1 in just one month last year. More recently, it appears sentiment towards the company has been gradually picking up again.
BRN share price
Brainchip background
BrainChip is focused on developing a neural networking processor, which it says will help bring artificial intelligence (AI) and other high powered computing to more customers.
The company’s Akida neural processer is designed to help customers create low-powered chips and systems, making powerful computing available outside a cloud environment.
Update highlights
Brainchip finished the most recent quarter with a US$20 million cash balance, partly pushed higher by the collection of $1.12 million in cash receipts and the proceeds of exercised options worth $3 million.
Brainchip still reported a cash flow negative quarter of $3.8 million, up from $2.7 million on the prior corresponding period (PCP). This was mainly due to a milestone payment of $2.25 million to a major supplier in advance of wafer fabrication for the production version of the Akida device.
At the end of the quarter, Brainchip’s design and manufacturing partner, Socionext, released the engineering layout of the production version of the AKD1000 chip to Taiwan Semiconductor Manufacturing Company.
It’s expected that production units will be available for testing in the third quarter.
Brainchip was recently added to the ASX300 index and the All Ordinaries, and Peter van der Made was appointed as the Interim Chief Executive Officer after the recent departure of Louis DiNardo last month.
Time to buy Brainchip’s shares?
This seems to be another step in the right direction for Brainchip. Given how much its shares have increased over the past nine months, much of this information is likely to be priced into its current valuation.
As part of the Rask investment philosophy, we try to look for companies that are within our Circle of Competence, i.e., We’re able to deeply understand the inner workings of the company.
Brainchip’s technology is undeniably interesting, but due to its complexity, I personally find it hard to gain any sort of informational edge over other investors, which is why I won’t be buying Brainchip’s shares at the moment.
For some more reading, I’d suggest getting a free Rask account and accessing our full stock reports. Click this link to join for free and access our analyst reports.
