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May 25th, 2022 | 11:46 CEST

Infineon, BrainChip, Daimler, Volkswagen - High-tech stocks at their best!

  • Electromobility
  • AI
  • Innovations
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The global automotive business is operating according to new laws. That is because e-mobility is a done deal, and if politicians' pronouncements are anything to go by, combustion engines will be history from 2030. As a result, the prerequisites for the industry are also changing because intelligent and powerful chips remain the basis for the further development of future mobility. Supply chains and Chinese reliability are still a problem, and high raw material prices will not make the new vehicles any cheaper. Innovations could be an effective means of combating the erosion of margins. Who is ahead in the market of high-tech players?

time to read: 4 minutes | Author: André Will-Laudien

Table of contents:

    Uwe Ahrens, Director, Altech Advanced Materials AG
    "[...] We know exactly what we are doing and are implementing what we consider to be a proven technology in an industrially applicable and scalable way. [...]" Uwe Ahrens, Director, Altech Advanced Materials AG

    Full interview


    Infineon - Well positioned moving forward

    Demand at Infineon continues to be high, so the Munich-based technology group wants to equip itself for the future to continue to meet the expected boom in demand. Last fall, Infineon opened a new plant for power semiconductors in Villach, Austria. One of the mainstays of planning for the current fiscal year is the progress made in the important automotive division AVT. Infineon's chip business is still booming, and demand continues to outstrip supply significantly, which is likely to remain the case in the coming quarters. A super scenario would not be the restrictions on the supply side. Important components currently take an eternity until they are ready for further processing.

    Currently, the semiconductor manufacturer continues to benefit from the weak euro because since the takeover of the US competitor Cypress, around two-thirds of revenues are now invoiced in dollars. By the end of September, Infineon plans to achieve above-average growth, especially in its CSS division, which supplies chips for consumer electronics and credit cards. The EU wants to provide additional support for the semiconductor industry. Infineon could benefit from this directly through subsidies and indirectly through the expansion of value chains. Infineon expects sales of EUR 13 to 14 billion in the current fiscal year, and the segment profit margin is seen at more than 22%.

    The analysts at DZ Bank maintain their "buy" recommendation for Infineon shares. The price target remains unchanged at EUR 36. They expect Infineon to achieve earnings per share of EUR 1.84 in 2021/22. That puts the P/E ratio at 14.8, which is too low for the DAX share!

    BrainChip Holdings - Partnerships with Edge Impulse and ARM announced

    BrainChip Holdings is an Australian semiconductor company that manufactures a revolutionary neuromorphic processor called "Akida". The Akida processor can learn on its own while in use, as it improves the overall performance of artificial intelligence systems by reducing latency and power consumption. The new chip with AI capabilities represents a wide range of application areas, including control of autonomous vehicles, IoT devices and drones.

    BrainChip recently announced it is entering into a new partnership with Edge Impulse to develop next-generation machine learning platforms. Both companies aim to make BrainChip's neuromorphic technology, based on Spiking Neural Networks, widely applicable. It will involve combining the two partners' existing technologies to realize shorter development cycles. It is also expected to accelerate time-to-market in the future to gain a competitive advantage. Edge Impulse is a leader in edge AI development, and together with BrainChip, they plan to develop smart devices with AI/ML capabilities.

    And another highlight: with recent news, the Australians have been accepted into ARM's AI Partner Program, one of the biggest names in the chip sector. The British manufacturer's blueprints are the dominant standard for smartphones, tablets and mobile IoT devices. With the inclusion in the AI Partner Program of the market giant ARM, BrainChip has again succeeded in a super deal. It will allow the chipmaker to significantly expand the commercial reach of its Akida processors in the future.

    Technology company BrainChip Holdings has come under a lot of pressure since selling off on the NASDAQ. After rising to over EUR 1.60 in January, the share price fell back to EUR 0.65 by May, with a jump to EUR 0.88 at the beginning of the week. Should the correction on the NASDAQ be over, the BrainChip share will certainly be one of the high-flyers again.

    Mercedes versus Volkswagen - Who is ahead in e-mobility?

    The automotive industry relies on innovative solutions from Infineon and BrainChip. Those who equip their models with high technology at least have a modern buyer base behind them. Tomorrow's idea of mobility is characterized by autonomous driving, and primarily electric, of course. At least, that is how the broad consensus on the latest trends feels.

    At the moment, however, there are still reservations about electromobility and autonomous driving. Too few charging stations, too short a range and still uncontrollable situations make the AI-controlled vehicle react incorrectly. In the field of battery development, Stuttgart has already come a long way, as Mercedes recently presented an e-mobile called Vision EQXX that scores points for its high energy efficiency and allegedly manages up to 1,000 kilometers with one charging cycle.

    VW is promoting a future program and the new Group strategy 2030, "NEW AUTO - Mobility for Generations to Come". The Volkswagen Group and its 10 brands are thus paving the way for the biggest change process in its history: the realignment to become one of the world's leading providers of sustainable mobility. To this end, the Group will equip its core automotive business with more than 30 additional fully electric models by 2025 and accelerate the expansion of battery technology. Autonomous driving will be implemented as a new core competence. It sounds very futuristic already, in our opinion.

    In the race for investor favour, Mercedes shares clearly led the way over the past 12 months. It gained 4% compared to the VW share, which fell behind by a whopping 31%. It is not possible today to reliably predict who will achieve their goals faster. The fact is that both companies together account for just one-fifth of Tesla Motors. The Germans still have a long way to go to catch up, and in our opinion, the starting signal has already been given.

    The big stock market correction in 2022 has made many interesting high-tech stocks cheaper again. Without knowing where the "bottom" will ultimately be, one can already sum up: Infineon, Mercedes, Volkswagen, and BrainChip have all been badly hit. These shares will undoubtedly be among the top favourites again in the next upswing.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author

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