Up 119% this year, can BrainChip shares soar again in 2025?

BrainChip Holdings Ltd (ASX: BRN) shares have been on a strong run to finish the year in 2024, with shares currently up 119% since January.

This wasn't a linear growth pattern, however. After peaking at highs of 49 cents apiece in February, shares were heavily sold, bottoming at 15.5 cents in September.

They have since taken an upward swing and rest at 37.25 cents at the time of writing.

The question now is whether BrainChip shares can sustain this momentum in 2025. Let's take a closer look.

What's propelling BrainChip shares?

BrainChip shares saw several jumps towards the back end of the year following updates on its Akida neuromorphic technology.

In December, the company secured a commercial licence agreement with Frontgrade Gaisler, a Swedish leader in radiation-hardened microprocessors for space applications.

According to The Motley Fool's James Mickelboro, this partnership marks a significant step for the company.

Under the agreement, BrainChip's Akida 1.0 technology will be incorporated into Frontgrade's "fault-tolerant system-on-chip solutions".

The agreement includes a 10% royalty on the net sale price of the first licensed product. It also includes an optional 150,000 Euro fee, or 15% royalty, for additional products.

Shares jumped from 25 cents apiece to their current level, marking a 46% jump in the past week alone.

Can BrainChip sustain its momentum?

BrainChip is expanding its presence in artificial intelligence (AI) alongside aerospace through collaborations with the European Space Agency and Airbus Defence and Space.

These announcements were also positive catalysts for BrainChip shares.

In December, it also announced a $1.8 million contract win with the Air Force Research Laboratory (AFRL).

The contract covers "neuromorphic radar signalling processing" and expands on BrainChip's previous contract wins with various government agencies.

According to management, the contract will demonstrate BrainChip's neuromorphic technology.

It will also "improve radar signalling applications for AFRL" and showcase "how neuromorphic computing can achieve significant benefits of low-power, high-performance compute in the most mission-critical use cases".

Previous comments on BrainChip noted that, prior to 2024, it had yet to demonstrate consistent revenue streams from its Akida technology.

This may be set to change with the number of contract wins the company announced in the second half of 2024.

Furthermore, the company has these contracts on its books leading into 2025. If it can capitalise on them, BrainChip shares could benefit, in my view.

For now, much of its potential hinges on its ability to convert these partnerships and agreements into recurring income, in my opinion.

BrainChip shares takeaway

BrainChip shares have delivered stellar gains this year, driven by a number of contract wins with global partners.

I believe the road ahead depends on the company's ability to turn innovation into sustainable revenue.

Time will tell what happens from here.

The post Up 119% this year, can BrainChip shares soar again in 2025? appeared first on The Motley Fool Australia.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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