Plug Power, BrainChip, Software AG - Crisis and no end

It is a revolution

"We have been and continue to be able to produce despite the chip shortage," BrainChip CEO Ken Scarince expressed at last week's virtual IIF- International Investment Forum. As the Company name suggests, the chip developed by the Australians is based on the human brain and, according to Scarince, offers "the most efficient AI solution ever produced."

The Akida chip shines with up to 50% lower energy consumption than conventional CPUs. That is because traditional chips need to communicate with the data center constantly. The innovation developed by BrainChip, on the other hand, works based on impulses and events, functions completely autonomously and processes so-called spikes instead of traditional computer data. In the process, Akida learns independently using artificial intelligence; the work is done directly on the chip and not in the data center. The management team sees the areas of application in autonomous driving, IoT devices, robotics, medical diagnostics and security technology.

Sample production has already taken place with SocioNext, a leading application-specific integrated circuit company, and Taiwan Semiconductor shipped the first generation of the chip series to Australia weeks ago. In the following weeks, it will be decided whether the starting signal for commercial production will be given already this year.

The Company's stock market value, which is traded in Frankfurt, is EUR 437.50 million, and the share price is EUR 0.29. Pitt Street Research still sees significant upside potential compared to the peer group and placed BrainChip at "buy" with a price target of EUR 0.94 in a recent study.

Digital disappointment

A drop of over 12% resulted from a forecast reduction by Software AG. Due to the solid quarterly figures of software giant SAP last week, one secretly hoped for better-than-expected results at the Darmstadt-based Company. However, the fact that the growth engine Digital Business, in particular, is sputtering was more than a surprise for investors and analysts alike. For the year as a whole, management now only expects currency-adjusted growth of 13 to 17% in the digital sector, compared with 15 to 25% previously.

Nevertheless, there was something positive to take away from the figures. The Company confirmed its medium-term forecasts until 2023. In addition, the Ebitda margin is now expected to be 17 to 19% instead of the previously forecast 16 to 18%. The reason for this is the brightening database business.

Following the key data for the third quarter, the major Swiss bank UBS reiterated its "buy" recommendation with a price target of EUR 44. The analysts' opinion is that the database business is making up for the negative effects caused by the disappointing digital business with integration software (DBP). As the latter is a declared growth area, this is nevertheless disappointing. Although the revised forecast implies a significant increase in bookings at DBP in the final quarter, this outlook is not without risks, said analyst Michael Briest.

Positive news flow continues

Already last week, fuel specialist Plug Power shone with positive news. In addition to the announcement of a cooperation with Airbus, which aims to explore the feasibility of supplying aircraft and airports with green hydrogen, came a partnership with Phillips 66 to jointly develop business opportunities with low-carbon hydrogen. Last week's news was topped off by an upgrade from US bank Morgan Stanley, which upgraded Plug Power to "overweight" with a USD 40 price target.

However, the positive news does not stop there. Plug Power is acquiring Applied Cryo Technologies, a US-based liquefied hydrogen service provider. ACT offers technologies, equipment, and services to transport, store, and distribute liquefied hydrogen, oxygen, argon, and nitrogen. The strategic acquisition expands the US Company's portfolio, which can help expand its green hydrogen ecosystem.

The chip shortage is causing production stoppages and weakening the economic upturn in the process. According to experts, an end is not expected until 2023. BrainChip produces the latest-generation chip without failures. Plug Power is on the run, and there is digital sand in the gears at Software AG.