Atomera (NASDAQ: ATOM) stock was up 45% after hours on their announcement of a deal with ST Microelectronics. This is good and wonderful and is in fact Atomera's first full commercial contract. Which comes with the usual promise of revenues. Which would be nice, for as the accompanying accounts show, Atomera doesn't in fact make revenue. The occasional little bit of engineering contract work - which isn't part of the main business model - but nothing from the main product, the MST system.
That MST idea sounds just great. A technology that allows chip makers to make better chips for less money - for that's the claim - should do well. At anything less than the bleeding edge of the business it is all about cost control after all. Commodity chips really are commodity chips. There is a certain problem here though. Which is that this Mears Silicon idea, they've been touting it for years. And gained not one customer until the announcement yesterday. Which does lead to certain questions about how obvious the benefits are. After all, it's 2023 right now and they've been working with STM on this since 2018 by their own reckoning. 5 years to clinch a sale? Let's say that the advantages cannot be overwhelmingly obvious if this is the case.
Atomera stock price from NASDAQ
That revenue from this deal is also some months away - and some unknown number of months away. The installation is upon the one single machine at present, once that is done then the new tech needs to be integrated into the design sequence and so on. This immediate jump in the stock price seems to be thinking that it will be a little more immediate than that.
The one issue that does work in Atomera's favour, to our mind, is that they are funded. Net loss (no revenue, recall?) is around $5 million a year, they've $17 million in cash and cash equivalents. So they've a couple of years runway before they have to call for more money - a couple of years in which it will be possible to see how this or any other deals go.
A possibly unkind and gossipy comment around the market is that Atomera is a stock for trading, not one for investing.
