BRN, NVX: What powered these ASX tech shares’ rally this week

July 22, 2022 03:18 PM AEST | By Ashish

BRN, NVX: What powered these ASX tech shares’ rally this week — Image source: ©Miflippo | Megapixl.com

Highlights

The past few weeks have seen ASX tech shares enjoy a sharp rebound.

Tech shares have gained confidence from the sharp gains witnessed on the NASDAQ.

Domestic tech stocks have also benefitted from robust earnings reports by US firms.

ASX 200 tech shares faced a series of challenges in FY22, with the ASX All Technology index (ASX:XTX) declining nearly 35%. For context, the ASX 200 (ASX:XJO) fell nearly 10% during the given period. But scenario has changed with the start of new fiscal year.

The past few weeks have seen ASX tech shares rebound sharply, presenting attractive buying opportunities for investors. The tech index has gained over 4% in the past four weeks, while the benchmark ASX 200 index has fallen over 4%.

What has boosted the prospects of ASX tech shares?

ASX-listed tech shares have gained confidence from the sharp gains witnessed on the NASDAQ in the past week. The tech-heavy US index has risen about 6% in the past five trading days.
Domestic tech stocks have also benefitted from robust earnings reports by US firms. US-based tech firms have beaten market expectations, providing a much-needed fillip to the global tech sector.
While a rise in inflation has put pressure on tech stocks turning tech firms’ far-off future earnings look less attractive, yields on long-dated bonds have fallen in recent weeks, leading to the re-rating of tech shares in the near term.

On that note, let us zero in on what has powered stock prices of tech shares such as BRN and NVX?

BrainChip Holdings Ltd (ASX:BRN)

The share price of the global artificial intelligence (AI) chip maker, BrainChip, has risen over 34% in the past five days despite no major price-sensitive news coming out of the company. The stock may have risen after the US passed CHIPS Act legislation providing US$50 billion in subsidies for manufacturing of computer chips.

Novonix Ltd (ASX:NVX)

The share price of the lithium-ion battery firm has risen over 23% in the past five days. While there were no major updates from company, the stock may have gained on account of Elon Musk’s recent comment on lithium.

During Tesla’s earnings call, Musk said, “Lithium is actually very common… But you have to refine the lithium into battery grade lithium carbonate and lithium hydroxide, which has extremely high purity. So, it is basically like minting money right now.”

How are other ASX-listed tech shares faring today?

NextDC share price was up 0.43%, at 1:54 PM (AEST)
WiseTech share price was up 1.59%
Life360 Inc share price was down 0.35%
Zip share price was up 15.48%
Appen share price was up 3.92%
WiseTech Global share price was up 1.48%
Block share price was up 0.35%.

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