November 23rd, 2021 | 12:22 CET
Rivian Automotive, BrainChip, Infineon, Nvidia - These are jumps à la Tesla!
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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.
Rivian Automotive - Even flying is no fun!
One of the most sensational IPOs of all time in 2021 was undoubtedly Rivian Automotive. The manufacturer of electric vans achieved a valuation at the IPO roughly equivalent to that of Volkswagen, a German flagship and global Company with over 9.3 million vehicles delivered in 2020. US investors on Nasdaq are so excited about dazzling innovations, and they whip every new release in terms of e-mobility through the orbit without reflection.
For example, they lavished a USD 153 billion valuation on Rivian at its IPO for a planned production of about 10,000 vehicles in 2022. Rivian wants to shake up the industry with its electric-powered pickups and vans. When Tesla went public in 2010, the Company had a stock market value of "just USD 2 billion" on the second day after its debut, and that was a hit at the time. That is because Tesla was a small start-up that simply packed an electric motor and some laptop batteries into an old Lotus. Fascinating, Mr. Spock would sum up.
Some 11 years later, the run on new shares in the e-mobility sector is so great that just the 1.1% stake held by RJ Scaringe, board member and founder of Rivian, is worth USD 2 billion after its second day of trading on the stock market. That is how quickly billionaires are born. Now rumors are surfacing that Rivian's battery power is in question when heating or cooling is needed. That is certainly not real news as far as e-mobility performance criteria go. But the stock could find itself in troubled waters as a result of such information. So, purely from a valuation perspective, Rivian is not a candidate for a serious long investment. But speculation is allowed in any direction - yesterday, Rivian already fell another 10%.
BrainChip Holdings - Innovations for the high-tech industry
A bottleneck for the high-tech industry is currently the availability of high-performance chips. Due to the tense worldwide situation in the industrial supply chains, there are extreme delays in delivering important components, starting from China. Development departments are also scrambling to bring high-performance innovations to the market. For instance, chips that allow a learning process and are equipped with powerful AI are needed for autonomous driving.
BrainChip Holdings is an Australian semiconductor company that manufactures a revolutionary neuromorphic processor called "Akida". This chip is the first fully digital computer chip that functions in the same way as the human brain, i.e. it processes so-called spikes instead of traditional computer data. Currently, BrainChip is coming up with a sensational cooperation. The Company announced that it has signed a four-year licensing agreement with MegaChips, a pioneer in the ASIC (Application Specific Integrated Circuit) industry, for the BrainChip Akida™ IP to further expand its technology position for next-generation edge-based AI solutions.
MegaChips is a global, multi-billion dollar semiconductor company headquartered in Japan. The joint solutions in the revolutionary Akida technology will find future applications in growth markets such as automotive, IoT, cameras, gaming and industrial robotics. In exchange for intellectual property and the provision of certain technical services, BrainChip will receive a license fee and additional payments during the agreement term. Due to its flexibility and scalability, Akida's technology can be used in advanced smart home, smart health, smart city, and smart transportation systems. The diverse range for such applications includes home automation, industrial IoT, robotics, security solutions, sensors, unmanned mobility solutions, medical instruments, and object, sound, smell and taste detection.
The BrainChip share is actively traded on the Nasdaq and in Germany. With the news, the stock went up 24% yesterday, so the stock has increased in price by 80% in just five weeks. Market capitalization is now around EUR 713 million. Clearly, this train is at full steam.
Infineon versus Nvidia - Who will win the race in 2022?
Infineon shares also went through the roof in 2021. Germany's largest chip producer is considered a direct beneficiary of the global chip shortage in this country. After a strong performance in the 2020/21 fiscal year, Infineon CEO Reinhard Ploss is even more optimistic for the new fiscal year. He sees the Group well equipped to continue its growth course dynamically. Sales and profitability of the semiconductor group are expected to increase strongly.
Against this background, analysts have recently raised their estimates and price targets for the DAX-listed group. 25 of the 30 experts who have issued a forecast recommend the stock as a buy. According to the forecast for the current financial year 2021/22 (as of the end of September), the experts' average target price has risen from EUR 42.2 to EUR 46.7. The top price target of EUR 51 comes from Goldman Sachs. Given the global decarbonization trend and solid profitability improvement, the house sees the ratio between opportunities and risks as favorable.
Can the Nvidia share keep up with that? Nvidia has been one of the best-performing chip stocks as the trend toward homeschooling, digital gaming platforms and high demand from the CoinMining sector have exploded the Californian's sales. Nvidia chips are used for high-performance graphics cards and autonomous driving. The demand for these components is enormous.
With 170% share price growth in just 12 months, it is currently a good 100% ahead of Infineon shares. However, the P/S ratio of the Germans is only 4, and that of the Americans is a measly 24. However, the technology trend is clearly made on the Nasdaq and not on the German stock exchange. We send the shares into the race at EUR 43 and EUR 300, respectively and simply look regularly at how the stories are developing. The technical trends are fully intact for both stocks.
The high-tech sector is carried by a wave of euphoria, where it ends, the investor always knows only in retrospect. Many of the technical trends have already run very hot, not to mention the valuations. Therefore, take a limited approach and invest according to your personal risk mentality. With a trailing stop on the upside, nothing can really go wrong in the medium term.
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