February 24th, 2023 | 15:55 CET
Nvidia, Meta Materials, Plug Power - Invest now in the mega markets of the future
Table of contents:
Meta Materials - Massive expansion of business areas
The developer of sustainable, highly functional materials, Meta Materials, has a clear lead over its peer group. The Canadians, who want to redefine the future of coating materials, are researching novel materials that can redirect light, sound, heat and radio waves using special nanotechnology. The technology has multiple applications and can be used worldwide in industries such as 5G communications, health and wellness, aerospace, automotive and renewable energy. Meta Materials has a significant competitive edge with 410 active patent documents, including 251 issued patents and 159 pending patent applications.
In order to further expand its businesses, the Company announced a USD 100 million capital increase. The proceeds will be used to develop Meta's product portfolio, including NANOWEB, Vlepsis, ARfusion and KolourOptik. In addition, the proceeds will be used for working capital, capital equipment purchases and general and administrative expenses.
In addition to the offering, Meta Materials also released unaudited fourth-quarter figures. Consolidated revenue for the final quarter was USD 1.4 million, and full-year revenue was USD 10.2 million. The loss for the fourth quarter ranged from USD 21 million to USD 30 million. Thus, for the full year 2022, losses ran between USD 91 million and USD 100 million. At year-end, Meta Materials still had cash and short-term investments of USD 11.8 million.
A contract for authentication and nano-optics security business with a maximum value of USD 41.5 million over a period of up to 5 years was secured with a G10 central bank customer. "Meta is developing a globally unique metamaterial nano-optical technology and anti-counterfeiting feature for our G10 central bank customer," said George Palikaras, president and CEO. "We are pleased to make progress on this prestigious and important contract with Meta Materials, the largest in the history of banknote security feature development." The global launch of its unique KolourOptik metamaterial nano-optical technology, which combines multi-directional motion, 3D stereo depth, high resolution and multiple colors, is planned for this year.
Nvidia - Forecasts exceeded
Positive signs came from leading graphics card maker Nvidia. The chip company was able to publish both revenue and profit above analysts' estimates. In the final quarter of fiscal 2023, which ended in late January, Nvidia posted revenue of USD 6.05 billion, up from USD 7.64 billion in the year-ago period. Profit was USD 1.41 billion, down from USD 3 billion at the end of 2021. For the first quarter of the current fiscal year 2024, the US giant expects revenues of around USD 6.5 billion.
Positive voices came from several analyst firms following the release. Especially in the boom topic of artificial intelligence, Nvidia Corp. is expected to emerge as the biggest winner among chipmakers after years of focusing on this technology made the Company a preferred supplier for tech companies. The key to the Company's success is that it controls about 80% of the graphics processor market. These specialized chips provide the computing power needed for services like OpenAI's Microsoft-backed chatbot ChatGPT.
Analysts at US analyst firm Bernstein Research raised their price target from USD 200 to USD 265 on the back of solid quarterly results and an outlook well above market expectations. The buy rating remains "outperform".
Plug Power - Week of truth
It will be exciting on Monday next week when the hydrogen specialist opens its books for the fourth quarter and the full year 2022. There were plenty of warnings in the run-up. In the third quarter, for example, sales targets were already cut to USD 845 million. At a strategy update in late January, CEO Andy Marsh warned again that the final quarter would likely be revised downward due to delayed product launches that impact the supply chain. Analysts are projecting revenue in the USD 766 million range, with a loss per share of USD 1.05.
Next year, however, Plug Power has predicted in the past everything is supposed to get better. For example, the new product units that have fallen behind schedule are to be included in the figures. For the current fiscal year, the US company expects sales of USD 1.4 billion with a gross margin of 10%; in 2026, the forecast is already USD 5 billion with a gross margin of 30%. The CEO's statement on profitability is important. For example, Plug Power is reaching the break-even point expected in 2024 with quarterly sales of USD 600 million and a gross margin of 20%.
Thus, with the current burn rate, another capital increase and dilution could be on the horizon. As of the end of September 2022, the cash position amounted to USD 1.75 billion. That means that in the first 9 months of last year, it fell by a whopping USD 1.2 billion. From a chart perspective, the 50-day line has just been breached to the downside. The next price target would be the support zone, currently at around EUR 11.
Nividia was able to convince analyst houses when publishing its annual figures. Plug Power will publish annual figures at the beginning of next week. Meta Materials intends to further push the expansion of its product portfolio.
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