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Investing.com - Ambarella (NASDAQ:AMBA) shares gained after KeyBanc maintained its Sector Weight rating on the company following strong quarterly results and raised guidance driven by accelerating edge AI opportunities. According to InvestingPro data, the company’s stock is currently trading near Fair Value, with 11 analysts recently revising their earnings estimates upward.
The semiconductor company reported robust fiscal second-quarter results and provided higher guidance for the third quarter, citing strong momentum in its Internet of Things (IoT) segment related to increasing edge AI wins. The company maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 2.73x.
KeyBanc noted that Ambarella’s IoT segment grew low-teens percentage quarter-over-quarter in the fiscal second quarter and is expected to grow mid-teens percentage quarter-over-quarter in the fiscal third quarter, with demand primarily driven by portable video applications from Insta360 and robotic aerial drones. This growth aligns with the company’s impressive revenue growth of 57.9% over the last twelve months. Get deeper insights into Ambarella’s growth potential with a comprehensive Pro Research Report, available exclusively on InvestingPro.
Based on these positive trends, Ambarella increased its full-year revenue guidance for fiscal year 2026 from 22% growth at the midpoint to 33% growth, according to KeyBanc’s research note.
While KeyBanc raised its estimates for Ambarella and expressed encouragement about the company’s progress in edge AI, the firm maintained its Sector Weight rating as it seeks "further proof points of sustainable growth" before becoming more positive on the stock.
In other recent news, Ambarella Inc . reported impressive financial results for its fiscal second quarter of 2025. The company achieved an earnings per share (EPS) of $0.15, significantly surpassing the forecasted $0.05. Revenue also exceeded expectations, reaching $95.5 million compared to the anticipated $90 million. These results indicate strong performance and have generated positive investor sentiment. Additionally, Summit Insights upgraded Ambarella’s stock rating from Hold to Buy. The upgrade is attributed to growth in Ambarella’s higher-priced computer vision system-on-chip products. Summit Insights also highlighted that recent performance was partly driven by customers accelerating purchases ahead of potential tariff implementations. These developments suggest a positive outlook for Ambarella in the near term.
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