Ambarella Stock Surges Following Strong Q2 2025 Earnings Report

What's Going On With Ambarella Stock After Earnings? - Ambarella (NASDAQ:AMBA)

Multiple analysts update coverage on Ambarella following the print. Ambarella, Inc. AMBA shares are trading higher Wednesday after the company posted better-than-expected second-quarter results. Here's a look at the details from the report. The Details: Ambarella beat analyst expectations on the top and bottom lines with quarterly losses of 13 cents per share and revenue of $63.724 million. Read Next: Kerrisdale Capital Is Short Lumen Technologies: Here's What To Know "In our second quarter, we achieved record revenue for our edge AI inference products, and we are anticipating double-digit sequential growth in our total revenue for the third quarter," said Fermi Wang, President and CEO. "Company specific drivers are more than offsetting the mixed global economic environment. We are now realizing initial revenue ramps from certain IoT and Automotive customers, especially from our new products. " Multiple analysts updated coverage on Ambarella following the print: Craig-Hallum analyst Richard Shannon maintained Ambarella with a Buy and raised the price target from $80 to $85. Morgan Stanley analyst Joseph Moore maintained an Overweight rating and raised the price target from $67 to $73. Needham maintained its Buy rating and $90 price target on the stock. TD Cowen analyst Matthew Ramsay maintained a Hold rating and raised the price target from $65 to $75. Stifel maintained its Buy rating and raised the price target from $75 to $80. AMBA Stock Prediction 2024: Equity research can be a valuable source of information for learning about a company's fundamentals. Analysts create financial models based on the fundamentals and expected future earnings of a company to arrive at a price target and recommendation for the stock. Shares of Ambarella have an average 1-year price target of $78.08, representing an expected upside of 47.91%. Because of differences in assumptions, analysts can arrive at very different price targets and recommendations. No analysts have bearish recommendations on Ambarella, while 10 analysts have bullish ratings. The street high price target from Needham is $90, while the street low from Wells Fargo is $55. AMBA Price Action: According to Benzinga Pro, Ambarella shares are up 12.7% at $59.47 at the time of publication Wednesday. Read Also: SentinelOne Reports Q2 Results: EPS In-Line, Revenues Beat Image: Courtesy of Ambarella, Inc. Market News and Data brought to you by Benzinga APIs

Why Ambarella Soared After Posting Q2 2025 Results (NASDAQ:AMBA)

Looking for more investing ideas like this one? Get them exclusively at DIY Value Investing. Learn More " Ahead of posting second quarter results for fiscal 2025, Ambarella, Inc. (NASDAQ:AMBA) traded as low as $40 earlier this month. In hindsight, Japan's Black Monday moment pulled semiconductor equipment stocks sharply lower. After AMBA stock double-bottomed, the share price gained to close at closer to its moving average. At the time of writing, AMBA shares added another 18% after posting a quarterly earnings per share loss and a 2.6% Y/Y increase in revenue. What did markets like about the company's results and outlook? Ambarella reported an EPS loss of $0.13, which beat consensus estimates by $0.06. Its revenue increased by 2.6% to $63.73 million, also exceeding expectations. Shares jumped by 18.5% in response to Ambarella's outlook. Below is the stock chart before the open: In the third quarter, the revenue forecast of between $77 million to $81 million surpasses the consensus estimate of $69 million. Markets are reacting to the wide difference between actual versus Wall Street's forecast. 10 analysts already raised their earnings to the upside in the last 90 days. In the factor grades offered by Seeking Alpha, the post-earnings rally will lift the momentum grade for AMBA stock after markets close today. In the earnings press release, President and Chief Executive Officer Fermi Wang said attributed company-specific drivers more than offsetting the mixed global economic environment. The firm may now recognize initial revenue ramping up as customers in the IoT and automotive fields order Ambarella's new products. Markets did not expect the automotive sector to initiate such project spending. The electric vehicle bubble accelerated its pop by November 2023. Tesla (TSLA) bounced back from its stock sell-off. Polestar (PSNY) declined in value and Fisker filed for bankruptcy. Lucid Group (LCID) and Rivian (RIVN), however, formed an uptrend this year. CEO Wang said that the company is optimistic about the long-term positioning of its new products. The company positioned them: "to scale our current computer vision business into more advanced AI networks, including vision-language models and GenAI, where rising edge compute needs can drive revenue growth in the years to come." In the last quarter, Ambarella posted operating expenses of $56.76 million, up slightly from $54.92 million. For Q3, it expects non-GAAP operating expenses in the range of $49 million to $51 million. Shareholders may infer that expenses will fall as research and development costs trend lower. The firm will pivot from product development toward accelerating initial product sales. The vision language model is an AI-like opportunity. Unlike ChatBots built on large language model training, Ambarella demonstrated LLaVA on an N1 chip at the Computer Electronics Show this year. This attracted many customers. Automotive firms expressed interest in attaching multiple cameras to LLaVA. CEO Wang said on the conference call that machines would have the capability of describing what the camera sees in real-time. The CEO acknowledged that the company talked about computer vision for three quarters already. This time, realized revenue growth is a strong possibility. CV72 may run on a smaller model. As a result, cameras would provide real-time feedback. No other company offers this functionality. If it is successful, Ambarella would have a strong moat. This would justify a higher share price, even after the post-earnings stock jump. In the next quarter, the CEO expects normal seasonality patterns (based on the last 10 years). In the next two quarters, results will benefit after the inventory correction is over. The company's sales growth begins from strong demand for the products in the ramping-up phase. Ambarella's positive outlook is notably in contrast to that offered by Ouster (OUST). OUST shares fell from around $11 to close at $7.49 in response to weak Q2 results and cautious Q3 guidance. CEO Angus Pacala reasoned that the headwinds from broader macroeconomic and industry trends are consistent with Ouster seeing "some customer schedules pushed to the right." As a result, Ouster warned that this would "soften" near-term growth. Samsara (IOT) and Rivian are both ramping up with CV5 implementation in their products. Although it raises Ambarella's quarterly forecast, it may not continue in future quarters. Investors seeking related stock picks in the automotive technology or EV sector may consider those two firms. Samsara is particularly attractive: it ranks 10 out of 192. Rivian will likely survive the EV downturn since it specializes in the truck sector. However, Tesla only needs to offer affordable mainstream Cyber trucks to take Rivian's market share. China's EV market downturn is another risk for Ambarella. Although it believes Chinese firms will keep driving innovative technology in vehicles, Ambarella is too optimistic. Firms like BYD Company (OTCPK:BYDDF) face punitive tariffs from the U.S., Europe, and Canada. Until recently, markets neglected Ambarella's growth prospects after losing patience. The strong guidance rewards shareholders who did not panic sell the stock earlier this month. Additionally, hype might lift AI-related stocks, but Ambarella's implementation of language models in computer vision is unique. The company will strengthen its moat as product sales accelerate. AMBA stock, even after rising today, does not fully price those growth prospects.

Why Ambarella Stock Is Surging Today | The Motley Fool

After the market closed yesterday, Ambarella published results for the second quarter of its current fiscal year (which ended July 31). The company delivered sales, earnings, and forward guidance that beat the market's expectations, and investors are buying up the stock today. Ambarella reported a loss of $0.13 per share on sales of $63.7 million in fiscal Q2, beating the average analyst estimate's call for a per-share loss of $0.19 on sales of $62.1 million in the quarter. Revenue for the company's edge artificial intelligence (AI) products hit a new high in the period, and management expects that momentum in the category will help the business deliver double-digit sales growth on a sequential quarterly basis in Q3. The company thinks its new products will lay the foundation for the business to branch its computer vision into more advanced AI networks and take advantage of trends including generative artificial intelligence. For the third quarter, Ambarella is guiding for sales to come in between $77 million and $81 million. If the company were to hit the midpoint of that range, it would mean delivering 56% growth over the $50.6 million in sales it posted in last year's quarter. Management also expects that the business will deliver a non-GAAP (adjusted) gross margin between 62.5% and 64%, and it's forecasting adjusted operating expenses between $49 million and $51 million. On the heels of the better-than-expected Q2 results, Ambarella stock has received a surge in positive coverage from analysts. For example, Morgan Stanley raised its price target from $67 per share to $73 per share and maintained an overweight rating on the stock. Meanwhile, TD Cowen raised its target from $65 per share to $75 per share. Stifel was even more bullish, reiterating a buy rating on Ambarella and raising its price target on the stock from $75 per share to $80 per share. Bank of America and Craig-Hollum also increased their valuation targets on the company.