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Investing.com - Rosenblatt Securities raised its price target on Ambarella (NASDAQ:AMBA) to $100 from $95 while maintaining a Buy rating, citing strong momentum in the company’s Edge AI applications. The semiconductor company, currently valued at $3.01 billion, has seen its stock rise nearly 20% over the past year, trading close to its 52-week high of $85.15.
The semiconductor firm reported revenue exceeding the high end of its guidance, driven by adoption of its 5nm system-on-chips (SoCs) in Edge AI applications. This growth stems from both higher average selling prices and increased unit shipments across portable video devices, robotic aerial drones, and edge infrastructure. The company’s impressive 57.91% revenue growth and robust gross profit margin of 59.82% reflect strong execution. Get deeper insights into Ambarella’s growth metrics with InvestingPro, which offers exclusive analysis and 6 additional key ProTips.
Management slightly adjusted its full-year revenue guidance to $379 million, down marginally from $380 million previously. While the company isn’t currently profitable, analysts tracked by InvestingPro predict a return to profitability this fiscal year, with forecasted earnings per share of $0.09.
Rosenblatt forecasts a moderation in average selling price growth for fiscal year 2027 compared to the significant lift expected in fiscal year 2026. The firm remains encouraged by Ambarella’s strong design pipeline, particularly in AI edge infrastructure and automotive markets.
The price target increase represents Rosenblatt’s confidence in Ambarella’s product cycle and growth trajectory in the expanding Edge AI semiconductor market.
In other recent news, Ambarella reported impressive fiscal second-quarter results for 2025, with earnings per share (EPS) of $0.15, significantly beating the forecast of $0.05. The company’s revenue also exceeded expectations, reaching $95.5 million compared to the anticipated $90 million. This strong performance was attributed to momentum in Ambarella’s Internet of Things (IoT) segment, driven by increasing edge AI opportunities. KeyBanc reiterated its Sector Weight rating on Ambarella, acknowledging the company’s robust quarterly results and raised guidance for the third quarter. Meanwhile, Summit Insights upgraded Ambarella’s stock rating from Hold to Buy, highlighting growth in the company’s higher-priced computer vision (CV) system-on-chip products. The firm noted that accelerated customer purchases ahead of potential tariff implementations contributed to the company’s near-term upside. These developments reflect a positive outlook for Ambarella as it continues to capitalize on emerging technology trends.
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