Key Stats for Ambarella Stock
- Price change for Ambarella stock in last 6 months: 12%
- $AMBA Stock Price as of Sep. 3: $63
- 52-Week High: $97
- $AMBA Stock Price Target: $95
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What Happened?
Ambarella (AMBA) stock is getting attention after the company posted fiscal Q2 results slightly above the midpoint of its guidance, powered by record edge AI revenue.
- Revenue hit $108.1 million, up 7.7% from the prior quarter and 13.2% from a year ago.
- Non-GAAP earnings came in at $0.18 per diluted share, with net income of $8.2 million.
- A major driver was the company’s 5-nanometer CV75 and CV72 AI chips, which are in the middle of a steep revenue ramp.
- Both the automotive and IoT businesses grew sequentially, with automotive revenue hitting a new company record thanks to strong commercial vehicle adoption of AI.
- On the IoT side, enterprise-focused business outperformed consumer-facing products.
- Looking ahead, Ambarella guided fiscal Q3 revenue to $115 million to $124 million, with a $119.5 million midpoint.
- Management expects growth to be led by Physical AI demand within the IoT market, and non-GAAP gross margin is expected to land between 59% and 60%.
One of the bigger updates from this quarter was Ambarella raising its five-year serviceable market forecast significantly, from $8.5 billion in fiscal 2027 to $22.9 billion by fiscal 2032.
That’s roughly 20% annual growth. IoT is now expected to make up about 70% of that opportunity by the final year, a notable shift in the company’s growth story.
Much of that upward revision comes from Ambarella’s push into edge infrastructure, moving beyond camera-focused chips into new AI accelerator products.
The company previewed a new chip called X7, which is now in sampling and can work as an AI coprocessor alongside Ambarella’s own chips or third-party processors from ARM or Intel.
It’s designed to run on just 4 to 5 watts of power with a small memory footprint, something management says gives it an edge in a crowded market that includes Nvidia, Qualcomm, and roughly 50 startups.
Ambarella also announced two new partnerships to expand its indirect sales channel.
CapGemini will help bring Ambarella’s AI platforms to larger enterprise customers, while distributor Macnica signed a seven-year deal to support smaller and mid-sized customers across markets like drones, retail, and manufacturing.
Management estimates each partnership could represent around $0.5 billion in revenue opportunity over seven years, though meaningful revenue contribution is still two to three years out.
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What the Market Is Telling Us About Ambarella Stock
The rally in Ambarella stock reflects growing confidence that the company’s edge AI positioning is translating into real revenue momentum, not just guidance optimism.
Robotics traction also continues expanding beyond the roughly $100 million and 15 design wins discussed last quarter, with new engagements including a CV72-based quadruped robot.
Still, rising memory prices and supply-chain costs remain a watch point heading into fiscal Q4, and management says it’s working closely with customers to secure adequate memory supply.
For now, though, strong automotive records and a much larger long-term market opportunity are giving investors reason for optimism.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
