Ambarella (NASDAQ:AMBA) Downgraded by Craig Hallum to Hold

Key Points

• Craig Hallum downgraded Ambarella to Hold from Buy and set a $70 price target, implying about 10.4% upside from the prior close. The broader analyst consensus is also Hold, with an average target of $94.22.
• Ambarella reported quarterly revenue of $108.1 million, up 13.2% year over year, and adjusted EPS of $0.18, slightly beating estimates. Management forecast next-quarter revenue of $115 million to $124 million, supported by demand for its edge-AI chips.
• Despite improving results, the company remains GAAP-unprofitable, gross margins declined year over year, and analysts cited elevated valuation and near-term margin uncertainty. The stock opened at $63.38 after falling 5.6%.

Ambarella (NASDAQ:AMBA - Get Free Report) was downgraded by stock analysts at Craig Hallum from a "buy" rating to a "hold" rating in a research note issued to investors on Friday, Marketbeat reports. They currently have a $70.00 price target on the semiconductor company's stock. Craig Hallum's price objective would suggest a potential upside of 10.44% from the company's previous close.

Other equities analysts also recently issued research reports about the stock. Consumer Edge reaffirmed a "buy" rating on shares of Ambarella in a report on Friday, May 22nd. Bank of America increased their price objective on shares of Ambarella from $72.00 to $96.00 and gave the stock a "neutral" rating in a research note on Friday, May 29th. Susquehanna raised their price objective on shares of Ambarella from $80.00 to $110.00 and gave the company a "positive" rating in a research report on Friday, May 29th. Rosenblatt Securities restated a "buy" rating and set a $120.00 target price on shares of Ambarella in a research note on Monday. Finally, Weiss Ratings raised shares of Ambarella from a "sell (e+)" rating to a "sell (d-)" rating in a report on Friday, July 10th. Five equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, Ambarella currently has an average rating of "Hold" and an average price target of $94.22.

Ambarella Trading Down 5.6%

AMBA stock opened at $63.38 on Friday. Ambarella has a 1-year low of $48.30 and a 1-year high of $96.69. The stock has a market cap of $2.78 billion, a price-to-earnings ratio of -39.37 and a beta of 2.09. The company's 50 day moving average is $74.31 and its 200 day moving average is $68.23.

Ambarella (NASDAQ:AMBA - Get Free Report) last posted its quarterly earnings data on Thursday, September 3rd. The semiconductor company reported $0.18 earnings per share for the quarter, beating the consensus estimate of $0.17 by $0.01. The firm had revenue of $108.12 million for the quarter, compared to analysts' expectations of $107.76 million. Ambarella had a negative net margin of 17.18% and a negative return on equity of 10.94%. The business's quarterly revenue was up 13.2% on a year-over-year basis. During the same quarter last year, the company posted $0.15 EPS. As a group, sell-side analysts forecast that Ambarella will post -1.13 EPS for the current fiscal year.

Insider Buying and Selling at Ambarella

In related news, CEO Feng-Ming Wang sold 16,250 shares of the firm's stock in a transaction that occurred on Wednesday, July 1st. The shares were sold at an average price of $90.08, for a total transaction of $1,463,800.00. Following the completion of the sale, the chief executive officer directly owned 773,607 shares in the company, valued at approximately $69,686,518.56. This trade represents a 2.06% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Yun-Lung Chen sold 9,856 shares of the company's stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $67.06, for a total value of $660,943.36. Following the completion of the transaction, the vice president directly owned 66,515 shares in the company, valued at approximately $4,460,495.90. The trade was a 12.91% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders have sold 58,519 shares of company stock valued at $4,595,475. Corporate insiders own 4.50% of the company's stock.

Institutional Trading of Ambarella

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in AMBA. Royal Bank of Canada increased its holdings in shares of Ambarella by 2.1% during the first quarter. Royal Bank of Canada now owns 64,744 shares of the semiconductor company's stock worth $3,258,000 after purchasing an additional 1,307 shares during the period. Advisors Asset Management Inc. boosted its stake in Ambarella by 44.1% in the 1st quarter. Advisors Asset Management Inc. now owns 935 shares of the semiconductor company's stock worth $47,000 after purchasing an additional 286 shares in the last quarter. AQR Capital Management LLC grew its position in Ambarella by 126.6% during the 1st quarter. AQR Capital Management LLC now owns 84,871 shares of the semiconductor company's stock valued at $4,272,000 after purchasing an additional 47,414 shares during the last quarter. Empowered Funds LLC grew its position in Ambarella by 34.6% during the 1st quarter. Empowered Funds LLC now owns 6,838 shares of the semiconductor company's stock valued at $344,000 after purchasing an additional 1,758 shares during the last quarter. Finally, Intech Investment Management LLC increased its stake in Ambarella by 48.1% during the 1st quarter. Intech Investment Management LLC now owns 25,586 shares of the semiconductor company's stock valued at $1,288,000 after purchasing an additional 8,306 shares in the last quarter. Institutional investors and hedge funds own 82.09% of the company's stock.

Key Headlines Impacting Ambarella

Here are the key news stories impacting Ambarella this week:

• Positive Sentiment: Ambarella reported fiscal Q2 2027 revenue of $108.1 million, up 13.2% year over year, and non-GAAP earnings of $0.18 per share, narrowly exceeding consensus estimates. GAAP net loss improved substantially to $6.7 million from $20.0 million a year earlier. Ambarella fiscal second-quarter results
• Positive Sentiment: Management forecast fiscal Q3 revenue of $115 million to $124 million, roughly in line with the $119.3 million analyst consensus, while citing record edge-AI revenue and strong demand for its 5nm CV75 and CV72 AI SoCs. Ambarella Q3 revenue outlook
• Positive Sentiment: New long-term agreements with Macnica and Capgemini are intended to expand Ambarella’s distribution, engineering and systems-integration reach across the Americas, EMEA and enterprise edge- and physical-AI markets. The initiatives could support future design wins and revenue growth, although financial contributions were not quantified. Ambarella Macnica agreement
• Neutral Sentiment: Bank of America analyst Vivek Arya reiterated a Hold rating, citing Ambarella’s elevated valuation and near-term uncertainty around margins, with only modest upside to his price objective. Bank of America Ambarella rating
• Negative Sentiment: GAAP gross margin fell to 57.7% from 58.9% year over year, and management expects Q3 non-GAAP gross margin of 59% to 60%, signaling limited near-term profitability expansion.
• Negative Sentiment: Despite improved adjusted profitability, Ambarella remains GAAP-unprofitable, and its cash balance declined modestly from the prior quarter. Ongoing investment in products and market expansion may continue to weigh on earnings.

About Ambarella

Ambarella, Inc is a global semiconductor company headquartered in Santa Clara, California, specializing in video compression, image processing and computer vision technologies. The company designs low-power, high-definition system-on-chip (SoC) solutions that enable the capture, processing and streaming of video in a variety of embedded applications. Ambarella's platforms combine advanced video encoding, multi-core central processing units and hardware accelerators to deliver high-resolution imaging with low power consumption.

Ambarella's product portfolio caters to multiple markets, including security and surveillance, automotive vision, wearable cameras, drones and robotics.

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