Key Points
Silicon anode batteries are expected to revolutionize the EV battery market.
Amprius Technologies is increasing its production and will soon open a second facility.
Enovix stock has returned to normal after a surge due to a contract with the US Army.
5 stocks we prefer over Amprius Technologies
Silicon has become an important commodity for tech investors, and the rise of AI has further increased its significance. While AI is a powerful trend, silicon can be used in various other ways, and one such application is in batteries. The development of new technology centered around silicon anodes is set to revolutionize the electrification market.
Silicon anode batteries offer advantages such as being cleaner, cheaper, having greater energy density, higher output, and faster charging speeds. Because of these benefits, OEMs in industries ranging from aerospace to automobiles and government applications are showing interest. Manufacturers like Porsche and Mercedes, as well as aerospace players like Airbus and the US Army, are already using silicon anode technology, and the word on the street is that more are looking into it.
The growth potential of the silicon anode market is considerable. It was valued at approximately $55 million in 2022 and is projected to grow at a near-50% compound annual growth rate for the next eight years. This would push the market to almost $1 billion by 2030, and these estimates may be conservative. The EV battery market alone is currently worth $55 billion and is expected to exceed $125 billion by 2028, indicating significant growth opportunities. While there are numerous global manufacturers focusing on silicon batteries, only two are publicly traded in the US.
Amprius Technologies Leads the US Silicon Industry
One of the key takeaways from the North American silicon anode battery industry is the emphasis on domestic manufacturing. Amprius Technologies, listed on NASDAQ as AMPX, already operates its primary facility for battery production and anticipates completing expansion plans later this year. The company is also working on a gigafactory in Colorado, which would double its expected GWh production by the end of this year.
Amprius Technologies has a bullish revenue growth outlook. The company has reached its maximum production capacity and has a full schedule for the next 12 to 18 months. Major clients such as Airbus, the Army, and AeroVironment utilize Amprius’ technology in their EV applications, including drones and electric vertical take-off and landing (eVTOL) vehicles. With the expanded facility, Amprius will be able to accommodate new clients, including Joby Aviation and Archer Aviation.
According to MarketBeat, which tracks Amprius stock, four analysts hold a positive view. They rate the stock as a Buy, with a consensus price target more than 200% higher than the current price. The lowest price target implies an almost 200% increase in value. The next notable event is the release of Q3 results in early November. Analysts anticipate a year-over-year increase in revenue, but they may be underestimating the results considering the strong performance in Q2.
Enovix Targets a Different Market
Enovix, listed on NASDAQ as ENVX, focuses on a distinct market compared to Amprius and complements its product offering. Enovix specializes in small batteries for various purposes, particularly those that support the Internet of Things (IoT). The company’s three-dimensional architecture is well-suited for small, always-on devices connected to the internet, and its batteries can already be found in numerous devices. Production is ramping up at the Freemont Fab1 facility, and it will accelerate further once the Fab2 facility in Malaysia becomes operational.
Analysts are more optimistic about Enovix stock, and MarketBeat is tracking nine analysts who rate it as a Moderate Buy. The mid-point consensus target suggests a 125% increase in value, while the lowest end of the range indicates over 50% growth. The upcoming catalyst for Enovix is the release of Q3 earnings at the end of October. Analysts expect a significant sequential revenue surge of over 100% and a substantial increase compared to last year.
Enovix stock experienced a surge earlier this year but has since corrected. The market price is now approaching critical support levels, possibly signaling a potential bottom. If the support levels do not hold, further decline may occur until the Q3 results are released. In this scenario, the stock may find support at the $10 level or lower, creating a more favorable risk-reward profile.
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