December 23rd, 2021 | 10:31 CET
+900% with Nvidia still not enough? Are Valneva and BrainChip on the verge of a breakthrough?
Table of contents:
Nvidia: Tenfold increase in three years still not enough for UBS
The performance of Nvidia stock in recent years has been breathtaking. With a gain of over 100% in the current year, it is again one of the top performers in the Nasdaq-100. In the past 3 years, the chip share has increased tenfold. Nvidia is on board with numerous megatrends like no other company. Artificial intelligence (AI), autonomous driving, the metaverse, crypto-mining are just a few examples. Fittingly, Forrester Research has just certified Nvidia as the leader in AI. The Nvidia GPUs its "synonymous with artificial intelligence." The Nvidia DNA can be found in every other AI solution. That means multi-billion markets - from pharmaceuticals to finance to retail - are open to the US company. So it is no surprise that Nvidia is UBS's top pick for 2022 - even though its market capitalization is already a whopping EUR 640 billion. Nvidia has drawn a wide "moat" around its business model. As a result, it could build stable revenue streams around the GPU and software segments.
BrainChip with a strong partner to break through?
The AI field is vast, and there is certainly room for others besides Nvidia. Perhaps for BrainChip Holdings? The share gained at least around 50% in the current year. The Australian Company's Akida chip is high-performance, small, with ultra-low power consumption and enables a wide range of edge functions such as on-chip training, learning and reasoning. In doing so, Akida learns autonomously using artificial intelligence, and the work is done directly on the chip rather than in the data center. The management team sees the areas of application in autonomous driving, IoT devices, robotics, medical diagnostics and security technology. The Company is heading into 2022 with a broad chest, saying it is on its way to becoming "the most efficient AI solution ever produced," CFO Ken Scarince. A first generation of the innovative chips has already been produced.
Within a cooperation with MegaChips Corporation, the next generation of AI-supported chips will now be developed. BrainChip thus has a strong partner at its side. The Japanese technology group is focused on automotive and industrial equipment growth areas, including 5G communications infrastructure and factory automation, and still turned over EUR 640 million last year. BrainChip's management sees the cooperation as an opportunity to "offer unprecedented products." Analysts also see a lot of potential. Pitt Street Research recommends BrainChip shares as a buy with a target price of EUR 0.94 (current price: EUR 0.43).
Valneva: Waiting for vaccine approval
When it comes to shares with potential in 2022, of course, a Corona winner should not be missing. In this case, Valneva. The Company's vaccine is currently undergoing approval testing. Following the positive study results, approval is expected in the first quarter of 2022. There was a positive signal on this yesterday - German Health Minister Karl Lauterbach announced that Germany has already ordered 11 million doses of the Valneva vaccine. There are high hopes for the new vaccines from Novavax - which was approved a few days ago - and Valneva. Both are based on different technologies than the mRNA vaccines from BioNTech and Moderna and are expected to convince the vaccine skeptics. The market capitalization could also convince investors to buy Valneva shares. At around EUR 2.7 billion, this is significantly lower than the EUR 14 billion of the second newcomer Novavax. In addition to the inactivated vaccine against COVID-19, Valneva also has other active substances in the pipeline. For example, positive study results of the chikungunya vaccine candidate VLA1553 have just been published. However, the approval and subsequent sales development of the COVID-19 active ingredient alone will likely be decisive for the share price development in 2022.
The stock market year 2022 is likely to be another exciting one. The development of the Corona pandemic, inflation and interest rates will set the direction for the overall market. But in the end, positive company developments will count. At Nvidia, BrainChip and Valneva, there are good reasons for rising prices.
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