14. September 2021 | 13:07 CET
Nvidia, BrainChip Holdings, Palantir - To the moon
According to high-ranking managers of the largest chip manufacturers such as Intel and Nvidia, the end of the semiconductor crisis is not in sight before the end of 2022. Besides the increasing demand for consumer electronics, computers and accessories since the beginning of the Corona Crisis, the industry is also being hit by the strong growth in demand from the automotive industry, which is increasingly relying on electronics. Artificial intelligence, 5G and the Internet of Things will further fuel demand in the coming years.
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ISIN: NVIDIA CORP. DL-_001 | US67066G1040 , BRAINCHIP HOLDINGS LTD | AU000000BRN8 , PALANTIR TECHNOLOGIES INC | US69608A1088
BrainChip Holdings - Welcome to the revolution
As early as 1950, Alan Turing first posed the question of whether machines could think. Since then, tremendous progress has been made in the field of artificial intelligence. Today, artificial intelligence is transforming both society and business. AI enables productivity gains, can improve quality of life, and even help address global challenges such as climate change, resource scarcity, and health crises.
However, one of the biggest problems with today's AI systems is their high power consumption. Unlike general-purpose chips like the familiar CPUs that need to communicate regularly with the data center, wasting vast amounts of precious energy, Australian Company BrainChip Holdings developed Akida. This revolutionary event-based processor works in the same way as the human brain, meaning it processes so-called spikes instead of traditional computer data.
The Akida processor can learn independently and does most of its work on-chip rather than in the data center, significantly reducing Internet bandwidth and latency. As a result, Akida meets the requirements of modern edge devices and is expected to be used in autonomous driving, IoT devices, robotics, medical diagnostics and security. The pattern was developed in collaboration with SocioNext, a leading application-specific integrated circuit company. Manufactured by Taiwan Semiconductor, the first generation was shipped last month. So it should be a matter of time before the big names in both the semiconductor and electrical industries take notice of the world first.
In 2019, chip giant Intel bought Israeli developer of programmable deep learning accelerators designed for the data center, Habana Labs, for USD 2 billion. Analysts at Pitt Street Research take this acquisition as a peer group comparison and therefore see a fair value of AUD 1.50, equivalent to EUR 0.94, for BrainChip Holdings' stock. The current share price in Frankfurt is EUR 0.32, which, according to the experts, represents a 200% opportunity.
Nvidia - Unstoppable
Quarter after quarter, the market leader of chip producers, Nvidia, proves its supremacy. Especially in the gaming segment, the Company has set a gold standard. The business with gamers contributes more than 40% of the total revenue. Besides the gaming sector, Nvidia is also successful in AI, data centers and automotive.
The strategically smart merger with ARM could lift the stock to completely new valuation levels in the future. ARM supplies IP technologies to semiconductor manufacturers and central processing units around the world. The suppliers use the intellectual property to produce semiconductor chips for their products and applications. According to insiders, the US Company plans to submit an application to the European Commission for the USD 54 billion acquisition of British chip developer ARM later in September. The Reuters news agency reported that the antitrust regulator is expected to begin an investigation that will last several months. The deadline for the acquisition is March, so the elephant wedding could be close. Initial criticism has already emerged from British antitrust watchdogs that the deal could harm competition.
Nvidia's share price has increased more than fivefold since the beginning of 2020 and is trading at USD 228, close to its all-time high of USD 230. Another breakout would generate a price target of USD 260. However, the stock is slowly entering overbought territory, so investors should set stop-loss orders. If the planned transaction with ARM is canceled, major setbacks loom.
Palantir - Cooperation terminated
Criticism from data privacy campaigners over a lack of transparency in contract awards to the US data giant prompted the UK's Department of Health to terminate an existing contract with Palantir. In August, the Department of Health and Social Care had issued a tender to move its Adult Social Care Dashboard from third-party vendors to an in-house system built by BAE Systems Plc, Europe's largest defense contractor. The successor is UK-based IT consultancy Mozaic Services, which already serves clients like Aviva, BP and the UK's National Health Service.
For the Palo Alto-based data analytics company, the loss of the relatively small contract is something to get over. From a technical perspective, prices around the USD 25 support area offer good long-term entry opportunities.
The chip shortage will continue to accompany us into the near future. New systems are more likely to increase demand. BrainChip Holdings developed a revolutionary chip that works like the human brain and offers significant advantages over competing products. Nvidia is the benchmark in the semiconductor industry, but at current levels, the air to the top is getting thinner. In contrast, Palantir offers a long-term buying opportunity.