April 26th, 2022 | 12:15 CEST
Chip industry booming: What are Mercedes partners BrainChip, Nvidia and Infineon doing?
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"[...] In Canada, there is $1.75 of debt for every dollar of disposable income - and that was true even before the pandemic. [...]" Karim Nanji, CEO, Marble Financial
Mercedes partner Brainchip with the next collaboration
Probably one of the most exciting listed chip newcomers is BrainChip. The Australian technology company is working on solutions in the field of artificial intelligence and machine learning. The Akida chip is the Company's current flagship product. It is a neuromorphic processor. It is said to be very close to the workings of the brain and thus, in particular, very energy-efficient. BrainChip sees applications in autonomous driving, IoT devices, robotics, medical diagnostics and security technology. The Australians caused a sensation at the turn of the year when it became known that Akida is installed in the Concept car EQXX from Mercedes and, among other things, makes the "Hey, Mercedes" voice control up to ten times more efficient than conventional voice control. There were also reports of interest on the part of the US Air Force. As a result, the share price exploded to EUR 1.20. In the context of the general weakness on the stock markets, the price returned to EUR 0.60. Operationally, the Company continues to step on the gas.
Most recently, BrainChip reported a cooperation with nViso SA. The Swiss company says its technology is the only one capable of analyzing human behavior signals such as facial expressions, emotions, identity, head posture, gaze, gestures, activities and objects with which users interact. In robotics and vehicle applications, human behavior analysis detects the user's emotional state to provide personalized, adaptive, interactive and safe devices and systems. This technology will be integrated into BrainChip's Akida processors. The partners see initial applications in the area of robots and surveillance systems. BrainChip CEO Sean Hehir said, "nViso's AI systems for analyzing human behavior offer fascinating possibilities in homes, cars, buildings, hospitals and more. We are excited to support these capabilities with BrainChip's processing power and energy efficiency." This may not have been the last interesting news from BrainChip this year.
Nvidia: Deutsche Bank reduces price target
Nvidia is one of the favorites of German investors. You can regularly find the stock in the top 5 most traded stocks. Not without reason. The technology company is involved with its chips in numerous megatrends such as gaming, autonomous driving and metaverse. Like BrainChip, Nvidia is also cooperating with Mercedes. For example, Mercedes will work with Nvidia to offer software packages for automated driving functions starting in 2024. In the process, the US-based company will earn money both from the sale of hardware and from a revenue share on software updates. The Nvidia share has not yet earned anything this year. It has lost around a quarter of its value so far, and analysts are skeptical at the moment. Most recently, Deutsche Bank had reduced the price target from USD 285 to USD 255. The assessment is still "hold". Nvidia is expected to publish quarterly figures at the end of May. Average analyst estimates are for quarterly earnings per share of USD 1.08 (source: Zacks Investment Research based on 10 analyst estimates). Last year, the Company earned USD 0.78 per share.
Infineon: Analysts skeptical in the short term
Infineon is one of the very few successful German chip manufacturers. But analysts are currently cautious about this share as well. Jefferies has confirmed the rating "Underperform". The price target is EUR 26. According to the analysts, things are going well in the industry and the figures of the European semiconductor companies in the first and second quarters are likely to exceed expectations. However, the potential for positive surprises in terms of gross margins is limited and the current semiconductor cycle is already well advanced. Therefore, the share prices of chip manufacturers are likely to remain under pressure. Barclays' price target for the Infineon share is somewhat higher. However, it was significantly reduced from EUR 45 to EUR 30. The rating remains "Equal Weight". In the long term, the Barclays analysts assess the prospects for the entire sector as positive. However, there could be a short-term downturn. Currently, the Infineon share is trading at around EUR 27.
The chip industry is benefiting from an undersupply and long-term megatrends such as autonomous driving. Nvidia and Infineon will also benefit from this. A real hot stock is BrainChip. Partners like Mercedes show that the Australians are on the right track.
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