Silicon has been an increasingly important commodity for tech investors, and the rise of AI takes that to the next level. As powerful as the trends in AI are, there are other ways to use silicon and batteries is only 1. Regarding batteries, new technology centered on silicon anodes is about to revolutionize the electrification market.
Silicon anode batteries are cleaner, cheaper, have greater energy density, have higher output, and charge faster, so OEMs from the aerospace industry to automobiles and government applications are interested. The word on the street is that manufacturers such as Porsche (OTCMKTS: POAHY) and Mercedes (OTCMKTS: MBGAF) are already looking into the technology, while aerospace players like Airbus and the US Army are already using it.
And the growth outlook is robust. The silicon anode market was valued at roughly $55 million in 2022 and is expected to grow at a near-50% CAGR for the next 8 years. That puts the market at nearly $1 billion by 2030, and the estimates may be low. The EV battery market alone is worth $55 billion today and is expected to top $125 billion by 2028, so there is a significant potential for growth. There are 10 to a dozen manufacturers focused on silicon batteries globally, but only 2 are traded on US exchanges.
Amprius Technologies Is The Leader in US Silicon
Among the many takeaways from the North American silicon anode battery industry is that they are focusing their production efforts on domestic manufacturing. Amprius Technologies (NASDAQ: AMPX) already has its flagship facility producing batteries and expects to complete expansion plans later this year. Amprius is also working on a gigafactory in Colorado that will double the expected GWh production it will achieve later this year.
Amprius Technologies’ revenue growth outlook is robust. The company has already maxed out its production capabilities and is booked solid for the next 12 to 18 months. Clients such as Airbus, the Army, and AeroVironment use the technology in their EV applications, including drones and eVTOL development. The expanded facility will allow it to take on new clients, including names like Joby Aviation and Archer Aviation.
Marketbeat.com is tracking 4 analysts with coverage of Amprius stock, and they are bullish. They rate the stock a Buy with a consensus more than 200% above the current price action. The low price target is more telling and implies a nearly 200% upside for this market. The next visible catalyst is the Q3 results in early November. The analysts expect a YOY increase in revenue but are underestimating results given the Q2 strength.
Enovix Is Focused on a Different Market
Enovix (NASDAQ: ENVX) is focused on a completely different market than Amprius and is a nice complement. Enovix is focused on small batteries for various purposes intended to facilitate the IoT. Their 3-D architecture is perfect for small, always-on devices connected to the Internet and can already be found in many devices. Production is ramping at the Freemont Fab1 facility and will supercharge over the next year as the Fab2 facility in Malaysia becomes operational.
The analysts are more enthusiastic about ENVX stock. Marketbeat is tracking 9 with a consensus of Moderate Buy. They see this stock increasing 125% at the mid-point consensus target and more than 50% at the range’s low end. The next catalyst is Q3 earnings, to be released at the end of October. The analysts expect revenue to surge more than 100% sequentially and quadruple digits compared to last year.
The price action in Enovix surged earlier this year but has since corrected. The market is back near critical support levels and may form a bottom soon. If not, this stock could continue lower until it delivers Q3 results. In that scenario, the bottom may be reached at the $10 level or lower, presenting a more favorable risk-reward profile.