Plus 300% in 3 months - what is next? Infineon, BYD, BrainChip

IIF - International Investment Forum opens its doors for the second time

For all investors, this year's IIF - International Investment Forum on Thursday, February 17, offers the chance to get to know 14 selected companies in more detail. The session will start punctually at 10:00 am CET, in English. A one-time registration to the event is available for all interested parties via this link.

BrainChip Holdings - There is still a lot in the pipeline

Also participating will be BrainChip Holdings from Australia, known for its trading volume of up to 10 million shares per day. The head of the Company, CEO Sean Hehir, will step in front of the audience at 19:00 and outline his strategy in the competitive chip market.

After a gain of over 300% in just 3 months, the share price has recently entered a slight consolidation. This follows the major trend on the NASDAQ, where the technology index NDX has given up 15% from the high so far. Tesla, the super-hyped representative of e-mobility, already lost 30% in the same period. The turnaround in interest rates on the US capital markets had led to this correction of the well-run tech stocks. It is not yet over!

However, the technological progress at BrainChip is counteracting the current price correction. The US Patent and Trademark Office recently granted the Company a patent for "Method and a System for Creating Dynamic Neural Function Libraries". This is a continuation of two previous US patents. According to BrainChip, this patent protects the basic structure and function of a digital neuron consisting of multiple synaptic circuits connected to a soma circuit in analogy to a biological neuron.

With the issuance of this additional US patent, BrainChip can demonstrate to its buyers that its technology is at the forefront of "revolutionizing artificial intelligence," according to company founder Peter van der Made. Previous attempts in this field of research have not yet been able to achieve comparable results. The Company's patent portfolio currently includes 8 patents issued in the US and one in China, and 21 pending patent applications in the US, Europe, Canada, Japan, Korea, Australia, Brazil, Mexico, and Israel.

Prominent BrainChip customers include NASA, Valeo, Nanose Medical, Renesas and Ford. A megatrend is likely to emerge in the area of "autonomous driving," and here, the Australians are already very far along with their technologies. BRN shares are actively traded in Australia, on the Nasdaq and in Germany. The market capitalization is currently around EUR 1.67 billion. Put the stock back on the watch list. The consolidation on the NASDAQ is likely to continue for a bit due to the interest rate shock. Technically, it should not go below EUR 0.80!

Infineon - Quarterly figures a good EUR 11 below high

Infineon shares recently lost almost 27% from the last high of around EUR 43.8. One reason was certainly a recent press conference, which offered an outlook on expectations for the current fiscal year. "2022 will be a strong year," stated CEO Reinhard Ploss. While the group is benefiting greatly from booming demand for chips, production capabilities are still impaired due to disrupted supply chains. That puts pressure on sales and weighs on margins.

Nevertheless, the trends around electrification and digitalization keep the order books full. CO2 reduction and the desire to make things intelligent and securely networked are the essential fundamental trends in all technology-oriented industries. Infineon is an important partner for many manufacturers who need modern chips with power-saving technologies. As a result, revenue in the new 2021/22 fiscal year is expected to increase in the mid-teens percent range, as the group announced on the last investor day. The operating margin in the segment result is also expected to increase to around 20%. However, Infineon assumes significantly higher investments of up to EUR 2.4 billion. The medium-term growth targets were thus confirmed, but the high expectations of the capital markets were probably not met.

Of 24 analysts, 21 are still positive, and the median price target is EUR 48.6 - around 50% above the current level. To prevent the medium-term chart picture from deteriorating further, the share price should not fall below EUR 30.50. The long-term investor can take advantage of the opportunities in the current correction but hedge holdings with a tight stop at EUR 29.

BYD - Premiere of a new e-crossover

BYD Company, financially supported by legendary US investor Warren Buffett and his fund Berkshire Hathaway since 2008, continues to expand its product portfolio in the field of New Energy Vehicles (NEV). In early February, BYD, "Build Your Dreams," announced a new NEV model that, according to initial designs, will be a new crossover SUV. The design of the electric car is modern and is intended to appeal primarily to the younger target group in China. So far, BYD has relied on the purely electric-powered SUV model Han EV.

China's NEV markets are also undergoing accelerated consolidation as the general chip shortage limits manufacturers' delivery capabilities. Local producers should continue to have advantages because, in BYD's case, the degree of interconnectedness with China's suppliers is very high. Low inventory levels and supply chain disruptions are now a challenging environment for European manufacturers, in particular, to cope with rapidly growing demand.

BYD shares have recently consolidated just as strongly, with the high for the year at EUR 36.50. Technically, the strong support at EUR 25 now comes into focus. The price should also turn around here to not attract further stop-loss sales. BYD should quickly be among the winners again when the markets have consolidated. Keep watch!

High prices, shortages of raw materials, and supply chain problems meet the unbroken demand for energy-efficient products. Growth momentum remains very high in the tech sectors. However, negative share price trends are weighing on the performance of the major protagonists. For innovative BrainChip, the high sector dynamics are a welcome environment for much growth.