Financial Performance - Ambarella reported revenue of $85.9 million for the first quarter of fiscal 2026, representing a 57.6% increase from $54.5 million in the same period of fiscal 2025 [6] - The gross margin under GAAP for the first quarter of fiscal 2026 was 60.0%, slightly down from 60.9% in the same period of fiscal 2025 [6] - The GAAP net loss for the first quarter of fiscal 2026 was $24.3 million, or a loss of $0.58 per diluted share, compared to a net loss of $37.9 million, or a loss of $0.93 per diluted share, in the same period of fiscal 2025 [6][16] - Non-GAAP net profit for the first quarter of fiscal 2026 was $3.0 million, or earnings of $0.07 per diluted share, compared to a non-GAAP net loss of $10.5 million, or a loss of $0.26 per diluted share, in the same period of fiscal 2025 [6][19] Guidance and Future Outlook - The company increased its revenue growth guidance for fiscal 2026 to a range of 19% to 25%, approximately $348 million at the mid-point, considering the uncertain geopolitical environment [4] - Revenue for the second quarter of fiscal 2026 is expected to be between $86.0 million and $94.0 million, with non-GAAP gross margin expected to be between 60.5% and 62.0% [6] Cash Position and Share Repurchase - At the end of the first quarter of fiscal 2026, Ambarella had total cash, cash equivalents, and marketable debt securities of $259.4 million, up from $250.3 million at the end of the prior quarter and $203.3 million a year ago [3] - The Board of Directors approved an extension of the share repurchase program for an additional twelve months, with approximately $48.0 million available for repurchase [5] Market Position and Innovation - Ambarella is recognized as the established leader in the edge AI market, achieving its fourth consecutive quarter of record AI revenue [4] - The company continues to innovate rapidly, leveraging its low power and scalable AI silicon and software architecture to extend its reach into the edge AI infrastructure market [4][8]

Core Viewpoint - Ambarella, Inc. is positioned for strong growth in the next 12-24 months, becoming a leader in "edge AI semiconductor" technology, as indicated by record AI-driven revenue in Q4 FY2025 [1] Group 1: Company Performance - The company reported record AI-driven revenue in Q4 FY2025, showcasing its leadership in the edge AI semiconductor market [1] Group 2: Management Philosophy - The CEO, Fermi Wang, emphasizes a disciplined and data-driven investment approach, focusing on simplicity and common sense for success [1] - The investment strategy is fully quant-driven, relying on model recommendations without human interference, which aims to eliminate individual bias in stock selection [1]

Core Viewpoint - Ambarella, Inc. will hold its first quarter fiscal year 2026 earnings conference call on May 29, 2025, at 1:30 p.m. Pacific Time, with the earnings release issued after market close on the same day [1]. Company Overview - Ambarella is an edge AI semiconductor company that provides products for various applications, including video security, advanced driver assistance systems (ADAS), electronic mirrors, drive recorders, driver/cabin monitoring, autonomous driving, and robotics [2]. - The company's low-power systems-on-chip (SoCs) are designed for high-resolution video compression, advanced image and radar processing, and deep neural network processing, enabling intelligent perception, fusion, and planning [2]. Conference Call Details - Interested participants must register online in advance to ask questions during the call, and dial-in numbers along with a personal identification number (PIN) will be provided upon registration [2]. - A live webcast of the conference call and a replay will be available on the company's investor relations website [2].

Industry Overview - The global drone market is projected to reach US$57.8 billion by 2030, up from an estimated US$40.6 billion in 2025, indicating significant growth across various industries [1] - The commercial service market is the largest segment, expected to generate US$29.4 billion by 2025, followed by commercial hardware at US$6.7 billion and commercial software at US$1.7 billion [1] - The total number of drone flights globally increased by 25% in 2024, rising from 15.5 million to 19.5 million flights [2] Regional Insights - North America and Asia are leading in drone usage, with Europe closely following, while Latin America and Africa are experiencing accelerated growth due to improved local ecosystems and drone accessibility [2] - Asia recorded the highest number of drone flights in 2024 at 6.3 million, followed by North America with 3.9 million and Europe with 3.8 million [2] Company Developments - ZenaTech, Inc. is set to showcase its Drone as a Service (DaaS) and AI drone innovations at two major investor conferences in May 2025 [3] - Ambarella, Inc. has achieved a milestone of 30 million cumulative units shipped and is demonstrating its generative AI capabilities at the ISC West security expo [4][5] - AgEagle Aerial Systems Inc. demonstrated its eBee VISION drone at a military symposium, highlighting its operational advantages for military applications [7][8] - Ondas Holdings Inc. secured a US$3.2 million purchase order from a UAE governmental entity to expand its urban autonomous drone infrastructure [9]

Core Viewpoint - The article highlights three under-the-radar AI stocks—Innodata, Ambarella, and Symbotic—that may present investment opportunities despite the current market volatility caused by increased tariffs from the Trump administration [1][2]. Group 1: Innodata - Innodata transitioned from a slow-growth analytics software company to a provider of task-specific microservices for AI data preparation, significantly increasing its revenue and adjusted EBITDA by 96% and 249% respectively in 2024 [3][4]. - Analysts project a compound annual growth rate (CAGR) of 31% for revenue and 29% for adjusted EBITDA from 2024 to 2026, with an enterprise value of $938 million, indicating it is reasonably priced at 23 times this year's adjusted EBITDA [6]. - Despite potential slowdowns due to macroeconomic challenges, Innodata is expected to maintain its position in the high-growth AI market niche [5]. Group 2: Ambarella - Ambarella specializes in image processing system on chips (SoCs) and computer vision chips, which are essential for security cameras, drones, and connected vehicles [7]. - The company experienced a 26% revenue increase in fiscal 2025, driven by stabilization in its automotive and IoT sectors, as well as increased sales of AI-oriented CV5 chips [9]. - From fiscal 2025 to fiscal 2028, analysts anticipate an 18% CAGR in revenue, with an enterprise value of $1.6 billion, making it reasonably valued at four times this year's sales [10]. Group 3: Symbotic - Symbotic develops fully autonomous warehouse robots and claims that a $50 million investment in its modules can yield $250 million in savings over 25 years [12]. - The company has a long-term contract with Walmart to automate its distribution centers, which accounted for 87% of its revenue in fiscal 2024, leading to a 55% revenue increase and positive adjusted EBITDA [13]. - Analysts expect revenue and adjusted EBITDA to grow at a CAGR of 25% and 76% respectively from fiscal 2024 to fiscal 2027, with an enterprise value of $891 million, indicating it is undervalued at 0.4 times this year's sales [15].

Core Insights - Ambarella, Inc. is advancing generative AI capabilities at the edge, showcasing its leadership in edge AI semiconductor technology with 30 million cumulative units shipped [1][5] Group 1: Product and Technology Advancements - Ambarella's latest demonstrations at ISC West highlight its scalable, high-performance reasoning and vision AI applications using the CVflow® 3.0 AI SoC portfolio, supporting GenAI models ranging from 0.5 to 34 billion parameters [3][4] - The company is debuting live demonstrations of DeepSeek GenAI models across different price/performance levels of its SoC portfolio, emphasizing real-time AI-powered security and analytics [3][4] - Ambarella's SoCs enable advanced reasoning capabilities without cloud processing, allowing deployment of the same AI models across various product tiers [4][5] Group 2: Competitive Differentiation - Ambarella distinguishes itself by providing integrated solutions that combine image processing, encoding, and system-level functions within its AI SoCs, rather than offering standalone AI accelerators [5] - The company emphasizes its superior AI performance per watt, which has facilitated the rapid deployment of over 30 million edge AI SoCs in the market [5] Group 3: Developer Ecosystem and Applications - Ambarella is focused on supporting edge AI developers through its Cooper™ Developer Platform and AI Model Garden, enhancing ease of use for developers [5][6] - The applications of Ambarella's technology span various sectors, including smart security, retail analytics, public safety, and industrial monitoring, enabling real-time video analysis and predictive maintenance [6][8]

Revenue Sources and Market Focus - Ambarella's revenue primarily comes from human-viewing applications, including IP security cameras and drones, with a focus on machine sensing since 2018[20]. - Sales to customers in Asia accounted for approximately 85%, 79%, and 79% of total revenue in the fiscal years ended January 31, 2025, 2024, and 2023, respectively, indicating a strong reliance on the Asian market[59]. - The customer WT Microelectronics Co., Ltd. accounted for approximately 63% of total revenue in fiscal year 2025, highlighting the company's dependence on a limited number of customers for significant revenue[62]. - A significant portion of revenue is derived from a limited number of customers, with WT Microelectronics Co., Ltd. accounting for approximately 63% of total revenue in fiscal year 2025[112]. - Approximately 63%, 53%, and 57% of revenue was derived from sales through a single distributor, WT, for the fiscal years ended January 31, 2025, 2024, and 2023, respectively[156]. Product Development and Technology - The latest CV3 AI central domain controller is designed for partially to fully automated driving applications, enhancing sensor fusion and planning capabilities[22]. - The N1 SoC can run large language models (LLMs) with up to 34 billion parameters, targeting IoT applications in industrial robotics and intelligent healthcare[23]. - The CV7 family offers a leading combination of low power and high performance for automotive and IoT edge AI applications, built on advanced 5nm process technology[21]. - Ambarella's acquisition of Oculii enhances its radar perception capabilities, improving resolution, range, and accuracy for mobility applications[24]. - The CV3-AD family of automotive AI domain controllers targets L2+ to L4 autonomous vehicles, featuring a 20x performance increase over the previous generation[38]. - Ambarella's AI SoCs are optimized for edge inference, providing low latency and high accuracy while minimizing power consumption[27]. - The company introduces two to three new silicon products annually, leveraging flexible software development kits to meet diverse market needs[37]. - The company has developed multiple generations of AI accelerator architecture, with third generation CVflow-based SoCs enabling efficient processing for transformer AI networks, crucial for next-generation automotive and generative AI markets[39]. - The company’s proprietary AmbaCast architecture provides up to 2x better compression efficiency with H.265 compared to H.264, enhancing video processing capabilities[56]. - The company’s CVflow architecture supports large language model inferencing with models up to 34 billion parameters on a single N-1 SoC, showcasing its advanced processing capabilities[52]. - The company’s software modules include features for automotive applications such as ADAS and autonomous driving systems, enhancing its product offerings[44]. - The company’s CVflow processors are designed for deep learning and HD radar processing, covering a broad range of consumer, professional, and automotive requirements with power efficiency[48]. - The company’s advanced image processing capabilities allow for capturing raw sensor data at up to 32-megapixel (8K) resolution at 60 frames per second, improving overall image quality[55]. Research and Development - Approximately 75% of the company's employees are engaged in research and development, focusing on integrating AI functionality into video processing solutions[72]. - The company has established four research and development design centers located in the United States, China, Italy, and Taiwan[73]. - Research and development expenses were $226.1 million, $215.1 million, and $204.9 million for fiscal years 2025, 2024, and 2023, respectively, with expectations for future increases[125]. - The company is increasing investments in research and development to target key markets such as automotive OEM and robotics[128]. - The company expects an increase in research and development expenditures compared to prior periods to support new technology and solutions[142]. Market Risks and Competition - The company anticipates increased competition in the semiconductor market, particularly in AI and video processing, which may lead to price pressure and reduced profitability[74][76]. - The company may face increased competition in the future, which could adversely affect revenue and market share[95]. - The semiconductor industry is highly cyclical, characterized by rapid technological change and price erosion, which could adversely affect business and operating results[131]. - The semiconductor industry is experiencing cyclical conditions, leading to unpredictable quarterly operating results and potential declines in margins and profitability[141]. - Competition in the semiconductor market is expected to intensify, which could result in price pressure and reduced profitability[116]. Supply Chain and Manufacturing - The company employs a fabless business model, outsourcing manufacturing to third-party foundries, which allows for flexibility and reduced capital requirements[67]. - The company currently manufactures solutions using 10nm and 5nm process nodes, with a substantial majority of SoCs supplied by Samsung Electronics Corporation[68]. - Global supply chain challenges have previously led to a semiconductor supply shortage, affecting manufacturing lead times and revenue[103]. - Shortages or increased costs of wafers and materials could adversely impact gross margins and lead to reduced revenues[106]. - The company relies on third-party foundries for manufacturing, which may lead to challenges in meeting customer demand and could negatively impact revenue[131]. - The company does not have long-term supply contracts with most primary third-party vendors, leading to potential supply constraints and pricing pressures[151]. - The company relies on third parties for manufacturing operations, and any disruptions could significantly impact production and customer relationships[149]. Financial Performance and Customer Dependence - The company faces significant risks if customers do not design its solutions into their products or if those products are not commercially successful, which could harm revenue[96]. - Demand for SoCs is influenced by customer product demand, which can fluctuate due to market conditions, leading to potential revenue shortfalls and excess inventory[110]. - The company has increased inventory levels due to longer manufacturing times and increased customer demand during fiscal year 2023, although inventory conditions have generally returned to normal[109]. - The complexity of the company's solutions could lead to unforeseen delays or expenses, impacting market adoption and operating costs[95]. - The company faces risks associated with international operations, including geopolitical instability and compliance with local laws[136]. Regulatory and Compliance Issues - The company is subject to governmental export and import controls, which could impair its ability to compete in international markets, particularly in China[99]. - Compliance with U.S. export controls is necessary, and failure to obtain required licenses could harm international sales and revenue[170]. - The company is subject to evolving privacy and data protection regulations, which may require significant changes to products and practices[175]. - Non-compliance with anti-corruption laws could result in penalties and adversely affect the company's operations and reputation[176]. - The company implemented an anti-corruption compliance program but cannot guarantee that all employees and partners will adhere to policies, which could lead to significant legal and financial repercussions[177]. - Compliance with increasingly complex environmental regulations may delay operations and increase costs, particularly due to the EU's RoHS directive and similar regulations in other jurisdictions[178]. - Failure to comply with environmental laws could result in fines, penalties, and disruptions in product shipments, adversely affecting business relationships and operational results[179]. - The company is subject to costly regulatory compliance requirements, including Section 404 of the Sarbanes-Oxley Act, which could harm business and operating results if not adhered to[180]. Cybersecurity and Operational Risks - The company’s cybersecurity risk management program is ISO 27001 certified and includes regular assessments and incident response plans[212]. - The Board of Directors oversees cybersecurity risks and receives updates on significant incidents, ensuring management accountability[218]. - The company conducts mandatory cybersecurity training for personnel and performs phishing tests to maintain awareness among employees[221]. - Security breaches pose a material risk to the company, potentially leading to unauthorized access to confidential information and significant costs[120]. - The company is vulnerable to operational disruptions from various risks, including technical breakdowns and geopolitical conditions, particularly in Taiwan or China[207]. - Climate change may lead to increased frequency and intensity of natural disasters, impacting the company's supply chain and customer demand[210]. Intellectual Property and Legal Risks - The company may face significant costs and operational impacts from potential intellectual property litigation, which is common in the semiconductor industry[193]. - The use of open source software in products may expose the company to risks that could compromise proprietary intellectual property[196]. - The company monitors open source software usage to prevent unintended disclosures of proprietary code, but risks remain if third-party software incorporates such elements[197]. - The trading price of the company's ordinary shares has ranged from a low of $36.02 to a high of $227.59 since February 1, 2020, indicating high volatility[198]. - The company faces potential significant legal expenses and damages related to alleged intellectual property infringements, which could impact financial performance[199]. Economic and Market Conditions - Global economic conditions, including inflation and recessionary concerns, may negatively impact customer demand and operating expenses[163]. - Trade tensions between the U.S. and China, including tariffs and export controls, create an uncertain business environment that could affect future operations[164]. - Restrictions on selling products to certain Chinese customers due to the BIS Entity List may lead to loss of market share and revenue[169]. - Fluctuations in currency exchange rates may adversely affect operating results, particularly with significant sales denominated in U.S. dollars[143]. - The semiconductor market has experienced extreme price and volume fluctuations, which may not correlate with the company's actual operating performance[200].

It has been about a month since the last earnings report for Ambarella (AMBA) . Shares have lost about 16.1% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Ambarella due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving Since Then?It tur ...

One stock that might be an intriguing choice for investors right now is Ambarella (AMBA) . This is because this security in the Electronics - Semiconductorsspace is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arguably taking place in the Compu ...

Core Viewpoint - Ambarella's stock experienced a significant drop of 17% following the release of its fiscal 2025 fourth-quarter results, despite strong revenue growth and profitability, presenting a potential buying opportunity for investors [2][3]. Financial Performance - Ambarella's fiscal Q4 revenue increased by 63% year over year to $84 million, surpassing the consensus expectation of $78 million [3]. - The company reported a non-GAAP profit of $0.11 per share, a notable improvement from a loss of $0.24 per share in the same quarter last year [3]. Market Dynamics - The demand for edge AI applications has accelerated Ambarella's growth, with 70% of its revenue in fiscal 2025 coming from edge AI processor sales [4][7]. - The edge AI market is projected to grow by 2.3 times over the next five years, driven by increased adoption in the markets Ambarella serves [6]. Product Development - Ambarella's AI capabilities in its computer vision processors enable advanced image and video interpretation, positioning the company well for future demand in edge AI devices [5]. - The introduction of smaller and optimized models is expected to enhance AI processing capabilities at the edge, further supporting revenue growth [8]. Future Outlook - Ambarella anticipates fiscal Q1 revenue to reach $84 million, representing a 54% increase from the previous year [9]. - Analysts have raised revenue growth expectations for Ambarella over the next three fiscal years, indicating confidence in the company's long-term prospects [9][11]. Valuation - The recent stock price drop has reduced Ambarella's price-to-sales ratio to 9, making it relatively attractive compared to the U.S. technology sector's average of 7.7 [10]. - The 12-month price target for Ambarella is set at $95, suggesting a potential 55% increase from current levels, reinforcing the case for investment [12].