Q2 FY2026 Financial Results Announcement [Q2 FY2026 Performance Highlights & Q3 FY2026 Outlook](index=1&type=section&id=Q2%20FY2026%20Performance%20Highlights%20%26%20Q3%20FY2026%20Outlook) Ambarella reported strong revenue growth and a non-GAAP net profit turnaround for Q2 FY2026, providing Q3 FY2026 guidance for continued revenue growth Q2 FY2026 and H1 FY2026 Key Financial Data | Metric | Q2 FY2026 | Q2 FY2025 | Change (YoY) | H1 FY2026 | H1 FY2025 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :--------- | | **Revenue (Million USD)** | 95.5 | 63.7 | +49.9% | 181.4 | 118.2 | +53.5% | | **GAAP Gross Margin** | 58.9% | 60.8% | -1.9 pp | 59.4% | 60.8% | -1.4 pp | | **GAAP Net Loss (Million USD)** | (20.0) | (34.9) | Improved 42.7% | (44.3) | (72.8) | Improved 39.1% | | **GAAP Diluted Loss Per Share** | (0.47) | (0.85) | Improved 44.7% | (1.05) | (1.78) | Improved 41.0% | | **Non-GAAP Gross Margin** | 60.5% | 63.3% | -2.8 pp | 61.2% | 63.3% | -2.1 pp | | **Non-GAAP Net Income (Loss) (Million USD)** | 6.4 (Income) | (5.5) (Loss) | Turnaround to profit | 9.5 (Income) | (16.0) (Loss) | Turnaround to profit | | **Non-GAAP Diluted Earnings (Loss) Per Share** | 0.15 (Earnings) | (0.13) (Loss) | Turnaround to profit | 0.22 (Earnings) | (0.39) (Loss) | Turnaround to profit | Q3 FY2026 Financial Guidance | Metric | Range (Million USD/Percentage) | | :----------------------- | :--------------------- | | **Revenue** | $100.0 - $108.0 | | **Non-GAAP Gross Margin** | 60.0% - 61.5% | | **Non-GAAP Operating Expenses** | $54.0 - $57.0 | [CEO's Strategic Commentary](index=2&type=section&id=CEO%27s%20Strategic%20Commentary) CEO Fermi Wang highlighted strong cyclical growth in the edge AI market, projecting record revenue growth for FY2026, alongside product development and production advancements - The company is experiencing strong cyclical growth in the edge AI market, with expanding applications driving demand for higher-priced 5nm AI SoCs[6](index=6&type=chunk) - Multiple portable AI video applications have entered production, with the first robotic drone project expected to ship in volume by the end of FY2026, and the first edge infrastructure project projected for production in FY2027[6](index=6&type=chunk) - FY2026 revenue growth forecast is raised to **31% to 35%** (midpoint approximately **$379 million**), with new Q3 and full-year revenue guidance midpoints setting new quarterly and annual total revenue records for Ambarella[6](index=6&type=chunk) - Over **36 million** edge AI processors have been shipped to date, establishing market leadership and focusing on customer needs in the edge AI market, including automotive[6](index=6&type=chunk) [Cash and Marketable Securities Position](index=2&type=section&id=Cash%20and%20Marketable%20Securities%20Position) Ambarella's cash, cash equivalents, and marketable debt securities increased at the end of Q2 FY2026 compared to the prior quarter and year-ago period, indicating robust liquidity Cash, Cash Equivalents, and Marketable Debt Securities (Million USD) | Time Point | Amount (Million USD) | | :------------------- | :-------------- | | End of Q2 FY2026 | 261.2 | | End of Prior Quarter | 259.4 | | End of Prior Year Period | 219.8 | Detailed Financial Statements [CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP)](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section presents Ambarella's condensed consolidated statements of operations under GAAP, detailing revenue, costs, expenses, and net loss for the three and six months ended July 31, 2025 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP) (Thousand USD) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $95,511 | $63,724 | $181,383 | $118,197 | | Cost of revenue | 39,280 | 24,983 | 73,616 | 46,296 | | Gross profit | 56,231 | 38,741 | 107,767 | 71,901 | | Operating expenses: | | | | | | Research and development | 59,734 | 56,760 | 118,553 | 110,897 | | Sales, general and administrative | 18,486 | 18,268 | 37,061 | 36,736 | | Total operating expenses | 78,220 | 75,028 | 155,614 | 147,633 | | Operating loss | (21,989) | (36,287) | (47,847) | (75,732) | | Other income, net | 2,247 | 2,145 | 4,422 | 4,416 | | Loss before income taxes | (19,742) | (34,142) | (43,425) | (71,316) | | Provision for income taxes | 253 | 747 | 898 | 1,505 | | Net loss | $(19,995) | $(34,889) | $(44,323) | $(72,821) | | Diluted loss per share | $(0.47) | $(0.85) | $(1.05) | $(1.78) | | Diluted weighted-average shares outstanding | 42,546,979 | 41,129,754 | 42,383,475 | 40,952,373 | [Non-GAAP Financial Measures and Reconciliation](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section explains Ambarella's use of non-GAAP financial measures, their differences from GAAP, and provides detailed tables reconciling GAAP net loss to non-GAAP net income (loss) [Non-GAAP Methodology and Exclusions](index=4&type=section&id=Non-GAAP%20Methodology%20and%20Exclusions) The company provides non-GAAP financial information as a supplement to GAAP statements, benefiting management and investors in assessing operational performance and liquidity, primarily excluding stock-based compensation and acquisition-related costs and their tax impacts - Non-GAAP financial information supplements GAAP statements, used to assess operational performance and liquidity, and provides greater transparency for investors[14](index=14&type=chunk)[15](index=15&type=chunk) - Non-GAAP financial measures exclude stock-based compensation and acquisition-related costs and their related tax impacts[4](index=4&type=chunk)[14](index=14&type=chunk) - GAAP reconciliation for non-GAAP gross margin and operating expense guidance for Q3 FY2026 is not feasible on a forward-looking basis due to the high variability and low visibility of relevant exclusion items[16](index=16&type=chunk) [Stock-based Compensation and Acquisition-Related Costs](index=5&type=section&id=Stock-based%20compensation%20and%20acquisition-related%20costs) This section details stock-based compensation expenses and acquisition-related costs included in various functional line items, explaining their impact on the difference between GAAP and non-GAAP gross margins Stock-based Compensation Expense (Thousand USD) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :---------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenue | $780 | $833 | $1,731 | $1,440 | | Research and development | 16,972 | 18,395 | 34,557 | 36,016 | | Sales, general and administrative | 7,436 | 8,384 | 15,030 | 16,192 | | **Total Stock-based Compensation Expense** | **$25,188** | **$27,612** | **$51,318** | **$53,648** | Acquisition-Related Costs (Thousand USD) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :---------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenue | $757 | $757 | $1,514 | $1,514 | | Research and development | — | — | — | — | | Sales, general and administrative | 456 | 530 | 912 | 1,050 | | **Total Acquisition-Related Costs** | **$1,213** | **$1,287** | **$2,426** | **$2,564** | - The difference between GAAP and non-GAAP gross margins primarily stems from the amortization of stock-based compensation and acquisition-related costs[19](index=19&type=chunk) [RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS (LOSSES) PER SHARE](index=5&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20DILUTED%20EARNINGS%20%28LOSSES%29%20PER%20SHARE) This section provides a detailed reconciliation table, showing the adjustments from GAAP net loss to non-GAAP net income (loss) and corresponding diluted earnings (losses) per share, primarily including stock-based compensation, acquisition-related costs, and income tax effects GAAP to Non-GAAP Diluted Earnings (Losses) Per Share Reconciliation (Thousand USD, except per share data) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP Net Loss | $(19,995) | $(34,889) | $(44,323) | $(72,821) | | Non-GAAP Adjustments: | | | | | | Stock-based compensation expense | 25,188 | 27,612 | 51,318 | 53,648 | | Acquisition-related costs | 1,213 | 1,287 | 2,426 | 2,564 | | Income tax impact | 22 | 448 | 36 | 600 | | **Non-GAAP Net Income (Loss)** | **$6,428** | **$(5,542)** | **$9,457** | **$(16,009)** | | GAAP Diluted Weighted-Average Shares Outstanding | 42,546,979 | 41,129,754 | 42,383,475 | 40,952,373 | | Non-GAAP Diluted Weighted-Average Shares Outstanding | 42,946,324 | 41,129,754 | 42,698,780 | 40,952,373 | | GAAP Diluted Loss Per Share | $(0.47) | $(0.85) | $(1.05) | $(1.78) | | Non-GAAP Adjustments: | | | | | | Stock-based compensation expense | 0.59 | 0.68 | 1.21 | 1.32 | | Acquisition-related costs | 0.03 | 0.03 | 0.06 | 0.06 | | Income tax impact | 0.00 | 0.01 | 0.00 | 0.01 | | Non-GAAP Diluted Weighted-Average Shares Outstanding Impact | — | — | — | — | | **Non-GAAP Diluted Earnings (Loss) Per Share** | **$0.15** | **$(0.13)** | **$0.22** | **$(0.39)** | [CONDENSED CONSOLIDATED BALANCE SHEETS](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section presents Ambarella's condensed consolidated balance sheets as of July 31, 2025, and January 31, 2025, detailing the composition of the company's assets, liabilities, and stockholders' equity CONDENSED CONSOLIDATED BALANCE SHEETS (Thousand USD) | Item | July 31, 2025 | January 31, 2025 | | :--------------------------------- | :------------------- | :------------------- | | **Assets** | | | | Current assets: | | | | Cash and cash equivalents | $142,739 | $144,622 | | Marketable debt securities | 118,444 | 105,643 | | Accounts receivable, net | 42,896 | 29,767 | | Inventories | 33,808 | 34,428 | | Restricted cash | 442 | 7 | | Prepaid expenses and other current assets | 5,543 | 6,084 | | **Total current assets** | **343,872** | **320,551** | | Property and equipment, net | 10,092 | 9,084 | | Intangible assets, net | 41,879 | 47,279 | | Operating lease right-of-use assets, net | 3,500 | 5,188 | | Goodwill | 303,625 | 303,625 | | Other non-current assets | 3,463 | 3,241 | | **Total assets** | **$706,431** | **$688,968** | | **Liabilities and Stockholders' Equity** | | | | Current liabilities: | | | | Accounts payable | 26,783 | 21,775 | | Accrued and other current liabilities | 76,190 | 80,781 | | Operating lease liabilities, current | 1,774 | 2,829 | | Income taxes payable | 1,713 | 1,383 | | Deferred revenue, current | 19,482 | 14,226 | | **Total current liabilities** | **125,942** | **120,994** | | Operating lease liabilities, non-current | 1,668 | 2,436 | | Other long-term liabilities | 2,301 | 4,126 | | **Total liabilities** | **129,911** | **127,556** | | Stockholders' equity: | | | | Preferred stock | — | — | | Common stock | 19 | 19 | | Additional paid-in capital | 872,822 | 813,683 | | Accumulated other comprehensive income (loss) | 59 | (233) | | Accumulated deficit | (296,380) | (252,057) | | **Total stockholders' equity** | **576,520** | **561,412** | | **Total liabilities and stockholders' equity** | **$706,431** | **$688,968** | Company Information and Disclosures [About Ambarella](index=2&type=section&id=About%20Ambarella) Ambarella specializes in edge AI semiconductors, with products widely used in edge AI and human vision, offering powerful deep neural network processing and high-resolution video compression technologies - Ambarella's products are widely used in edge AI and human vision applications, including video security, advanced driver assistance systems (ADAS), electronic mirrors, drive recorders, driver/cabin monitoring, autonomous driving, and robotics applications[8](index=8&type=chunk) - The company's low-power system-on-chips (SoCs) provide powerful deep neural network processing for intelligent perception, fusion, and planning, along with high-resolution video compression, advanced image, and radar processing[8](index=8&type=chunk) ["Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995](index=2&type=section&id=%22Safe%20harbor%22%20statement%20under%20the%20Private%20Securities%20Litigation%20Reform%20Act%20of%201995) This statement advises investors that the press release contains forward-looking statements, and actual results may differ materially due to various risks, uncertainties, and assumptions, thus cautioning against undue reliance on such information - The press release contains forward-looking statements identifiable by words such as "outlook," "project," "intend," "will," "estimate," "expect," "believe," "may," and "should"[9](index=9&type=chunk) - The achievement or success of forward-looking statements involves risks, uncertainties, and assumptions, and actual results may differ materially from those projected or implied[10](index=10&type=chunk) - Risks and uncertainties include global economic and political conditions, changes in government policies, revenue from new customers or design wins, commercial success of customer products, inventory management capabilities, growth strategies, ability to forecast market demand, introduction of new solutions and technologies, customer relationships, market expansion, global health conditions, growth management, retention of key employees, and intellectual property disputes[11](index=11&type=chunk) [Quarterly Conference Call Details](index=2&type=section&id=Quarterly%20Conference%20Call) Ambarella plans to host a conference call to discuss Q2 FY2026 results, with a webcast and archived information available - Ambarella plans to host a conference call at **4:30 p.m. ET / 1:30 p.m. PT** to discuss Q2 FY2026 results[7](index=7&type=chunk) - A live and archived webcast of the conference call will be available on Ambarella's website for up to **30 days**[7](index=7&type=chunk)

Core Viewpoint - Ambarella, Inc. reported strong financial results for the second quarter of fiscal year 2026, with significant revenue growth driven by the edge AI market and an optimistic outlook for future performance [1][4]. Financial Performance - Revenue for the second quarter of fiscal 2026 was $95.5 million, representing a 49.9% increase from $63.7 million in the same period of fiscal 2025 [5]. - For the six months ended July 31, 2025, revenue totaled $181.4 million, up 53.5% from $118.2 million for the same period in fiscal 2024 [5]. - GAAP net loss for the second quarter was $20.0 million, or loss per diluted share of $0.47, compared to a net loss of $34.9 million, or loss per diluted share of $0.85, in the same period of fiscal 2025 [5]. - Non-GAAP net profit for the second quarter was $6.4 million, or earnings per diluted share of $0.15, compared to a non-GAAP net loss of $5.5 million, or loss per diluted share of $0.13, in the same period of fiscal 2025 [5]. Guidance and Outlook - The company increased its revenue growth estimate for fiscal 2026 to a range of 31% to 35%, approximately $379 million at the midpoint [4]. - Revenue guidance for the third quarter of fiscal 2026 is expected to be between $100.0 million and $108.0 million, with a non-GAAP gross margin expected to be between 60.0% and 61.5% [5]. Market Position and Strategy - Ambarella has shipped over 36 million edge AI processors to date, establishing itself as a market leader in the edge AI sector [6]. - The company is focused on expanding its applications in the edge AI market, including automotive and robotics, with expectations for production shipments from new product wins [4][7]. Cash Position - Total cash, cash equivalents, and marketable debt securities at the end of the second quarter of fiscal 2026 was $261.2 million, compared to $259.4 million at the end of the prior quarter and $219.8 million a year ago [3].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Semiconductors, specifically focusing on North America - **Key Companies Discussed**: Intel (INTC), NVIDIA (NVDA), Marvell Technology Group Ltd (MRVL), Ambarella Inc (AMBA) Intel (INTC) - **Government Investment**: Intel has entered an agreement with the US government for an equity stake involving an $8.9 billion investment, funded by CHIPS Act grants and the "secure enclave" program [2][2] - **Equity Details**: The investment is priced at $20.47 per share, with a warrant for an additional 5% of shares at $20 if Intel's foundry ownership falls below 51% [2][4] - **Business Flexibility**: The deal allows Intel to optimize its business model without public service commitments, indicating a potential shift away from foundry services [3][3] - **Foundry Strategy**: There is skepticism about the viability of Intel's foundry strategy, with a suggestion that optimism around CHIPS funds may have been misplaced [3][5] NVIDIA (NVDA) - **Earnings Outlook**: Anticipated revenues for October are projected at $52.5 billion, with some analysts suggesting potential upside to $55 billion [10][10] - **China Market Concerns**: Uncertainties regarding China could clarify expectations, with management expected to guide conservatively due to licensing issues and potential restrictions on American chip sales to China [11][12] - **Investor Sentiment**: There has been a shift from pessimism to optimism regarding NVIDIA's earnings, with strong anecdotal evidence supporting growth in the next 12 months [10][13] Marvell Technology Group Ltd (MRVL) - **Earnings Preview**: Expected upside from optical segments, with AI revenue projected to grow to $876 million (+6.6% q/q) in July and $955 million (+9.0% q/q) in October [18][29] - **Automotive Divestiture**: The recent divestiture of the automotive ethernet business for $2.5 billion is expected to enhance GAAP profitability in the October quarter [31][31] - **Market Position**: Despite some share loss to competitors, Marvell is expected to benefit from the 1.6T upgrade cycle and maintain a strong position in optical markets [18][29] Ambarella Inc (AMBA) - **Growth Drivers**: Strong demand in IoT is expected to offset pressures in the automotive sector, with revenue projected at $90 million (+41% y/y) for July and $92 million (+11.6% y/y) for October [23][54] - **Strategic Options**: There are reports of Ambarella exploring strategic options, including a potential sale, which could unlock value by pairing its technology with larger distribution networks [24][55] - **Technology Leadership**: Ambarella's edge AI technology is considered best-in-class, but commercialization in the automotive supply chain has faced challenges [24][55] Additional Insights - **Market Sentiment**: Overall sentiment in the semiconductor sector appears to be cautiously optimistic, with potential for positive shifts in stock performance for companies like Marvell and Ambarella [22][32] - **Valuation Concerns**: Despite growth potential, valuation remains a concern for Marvell, leading to an equal-weight rating [37][42] - **Long-term Prospects**: Ambarella's long-term prospects are viewed positively, particularly in the context of computer vision applications, although current development in automotive autonomy is slow [59][64] This summary encapsulates the key points discussed in the conference call, highlighting the current state and outlook of the semiconductor industry and the companies involved.

SANTA CLARA, Calif., Aug. 07, 2025 (GLOBE NEWSWIRE) -- Ambarella, Inc. (NASDAQ: AMBA), an edge AI semiconductor company, today announced it will hold its second quarter fiscal year 2026 earnings conference call on Thursday, August 28, 2025 at 1:30 p.m. (Pacific Time). The company will issue its earnings release after the market closes that same day. About Ambarella Ambarella's products are used in a wide variety of edge AI and human vision applications, including video security, advanced driver assistance s ...

Core Insights - The future of AI is characterized by the emergence of Physical AI, which integrates digital AI with machines and devices capable of real-time interaction and learning [1] - Technologies such as Automated Vehicles (AVs), warehouses, and business systems are currently in use and represent significant investment opportunities [1] Company Summaries NVIDIA - NVIDIA is positioned as a leader in AI due to its GPU technology, which has been pivotal in unlocking the data center industry and AI applications [2][3] - The company is developing infrastructure for Physical AI across various sectors, including automotive, robotics, and smart cities [3] - NVIDIA's stock is considered undervalued with a potential increase of 200% over the next decade based on long-term earnings forecasts [4] Advanced Micro Devices (AMD) - AMD is set to regain market share in the GPU and data center markets, focusing on bringing AI to the edge with its Ryzen line optimized for AI experiences [6][7] - The stock is viewed as deeply undervalued, with potential for high triple-digit gains within the next five to ten years [8] Tesla - Tesla is focusing on the future of AV with the upcoming release of its fully autonomous Cybercab, expected in 2026, alongside advancements in robotics [10][11] - Despite facing challenges, Tesla continues to generate profits and invest in future technologies, indicating a potential for a 100% increase in stock value based on long-term outlooks [12] Ambarella - Ambarella has shifted focus from image processing to computer vision and edge computing, positioning itself as a key player in Physical AI [14][15] - The company is expected to sustain high double-digit growth for at least the next ten years, with stock potential to rise by 100% based on forecasts [16] Symbotic - Symbotic automates supply chains for major companies like Walmart and Amazon, enhancing efficiency and reducing emissions [18][19] - The company has a significant backlog exceeding $23 billion, indicating strong future growth potential [19]

Group 1: Amprius Technologies - Amprius Technologies' stock price is rising, reaching multi-year highs in Q3 2025, driven by improved manufacturing capabilities and increased sales, with Q1 revenue exceeding consensus by approximately 35% [2][3] - The company specializes in advanced silicon-anode lithium-ion batteries, serving diverse industries including aerospace and defense, with a client base growing by roughly 65% in Q1 to over 100 [4] - Analysts unanimously rate AMPX as a Buy, expecting a 60% advance, with a high-end target of $15, indicating a potential 150% gain [5] Group 2: Joby Aviation - Joby Aviation is ramping up manufacturing capabilities and is on track for commercial operations in 2026, with a growing deal pipeline and regulatory processes progressing smoothly [8] - The company has secured a distribution agreement in Saudi Arabia, potentially worth $1 billion or more in total revenue within a few years [9] - Despite a Hold rating from analysts, increased coverage and price target increases are trending higher, with Q2 earnings expected to act as a catalyst for share price [11] Group 3: Ambarella - Ambarella is positioned for substantial long-term growth in the physical AI sector, focusing on computer vision semiconductor solutions and edge computing, with a consensus low 20% compound annual growth rate (CAGR) expected through the middle of the next decade [13] - Recent bullish price action includes a sharp advance in late June and early July, confirming a recent bottom and suggesting a potential move to the $80 range [14] - Analysts rate AMBA as a Moderate Buy, with expectations of a 25% advance at consensus [15]

Group 1: BlackSky Technology - BlackSky Technology Inc. has seen a 21% increase in share price due to a $24 million contract with the National Geospatial-Intelligence Agency, which is part of a larger potential business opportunity [4][6] - The company is expanding its satellite project to enhance its high-frequency monitoring capabilities, with initial launches expected in 2027 [5] - BlackSky's subscription-based geospatial intelligence service has a backlog exceeding $350 million and year-over-year sales growth over 20%, although it continues to face quarterly losses [6] Group 2: Core Scientific - Core Scientific Inc. shares surged approximately 49% following renewed acquisition talks with AI hyperscaler CoreWeave, which previously made an unsolicited offer of $5.75 per share in 2024 [7][8] - The company's market capitalization has surpassed $5 billion, indicating strong investor interest and potential for a premium acquisition offer [8] - Core Scientific has established multiple agreements with CoreWeave, enhancing its infrastructure capabilities despite the previous failed acquisition attempt [9] Group 3: Ambarella - Ambarella Inc. experienced a rally amid speculation of a potential sale, although this remains unconfirmed [11] - The company's Edge AI system-on-a-chip solutions are gaining traction in the market, which could support its recovery following a challenging 2024 [12] - Analysts have a consensus rating of eight Buys and four Holds for Ambarella, with a price target suggesting a 28% upside potential [12]

Group 1 - The conference call is focused on Ambarella's Q4 and Fiscal Year 2025 financial results [3] - Participants include key executives such as the CEO, CFO, and VP of Corporate Development [1][2] - The call will also feature a Q&A session after the presentation [1] Group 2 - The discussion will include forward-looking statements regarding projected financial results and market growth [4] - These statements are based on current information and are subject to various risks and uncertainties [4] - The company is not obligated to update these forward-looking statements [4]

Core Viewpoint - Ambarella shares increased by 17% following reports of the company working with bankers on a potential sale [1] Group 1: Company Developments - Ambarella is reportedly in discussions with bankers regarding a potential sale, although no deal is imminent [1] - The company may attract interest from semiconductor firms aiming to enhance their automotive business [1] - Private equity firms have already shown interest in Ambarella, according to the report [1]

Core Viewpoint - Artificial intelligence (AI) is significantly transforming various industries, leading to increased spending on AI solutions and infrastructure, which is reflected in the stock market performance of tech companies [1][2]. Group 1: ASML Holding - ASML Holding has seen limited stock price growth despite the surge in demand for AI chips, with only a 5% increase in stock price over the past couple of years [5]. - The company experienced a challenging 2024, with minimal revenue growth and declining earnings due to weak chip demand in personal computers and smartphones [6]. - In Q1 2025, ASML's revenue increased by 46% year-over-year, and earnings nearly doubled, with new equipment orders worth nearly 4 billion euros, marking a 10% increase from the previous year [7][8]. - ASML forecasts 32.5 billion euros in revenue for 2025, a 15% increase from 2024, with potential for faster growth driven by AI demand [8][10]. - The company’s EUV lithography machines are essential for manufacturing advanced chips, and demand for these chips is expected to grow at an annualized rate of 35% through 2033 [10][11]. - Analysts predict an acceleration in ASML's earnings growth due to increased investments in manufacturing infrastructure by foundries and chipmakers [12]. - ASML's stock is trading at an attractive 27 times forward earnings compared to the U.S. technology sector's average of 47 [14]. Group 2: Ambarella - Ambarella is positioned to benefit from the growth in AI, particularly in the automotive sector and IoT devices, with its computer vision chips [15]. - The edge AI market, where Ambarella operates, is expected to grow at a compound annual growth rate of 33% through 2032 [16]. - Ambarella generated $285 million in revenue for fiscal 2025, with over 70% from edge AI applications, marking a 26% revenue increase [17]. - The company reported a 58% year-over-year revenue increase in Q1 of fiscal 2026, reaching $86 million, and an adjusted profit of $0.07 per share [18]. - Ambarella's guidance for the current quarter indicates a 41% year-over-year revenue jump, suggesting potential for stronger growth than currently anticipated [19]. - Analysts expect Ambarella to report a profit this year, with strong bottom-line growth projected for the next few fiscal years [20]. - The company's serviceable addressable market is expected to reach $13 billion in the next five years, indicating long-term growth potential [22].