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Investing.com - Needham has raised its price target on Ambarella (NASDAQ:AMBA) to $100.00 from $90.00 while maintaining a Buy rating, following the company’s strong fiscal second-quarter results. The stock, currently trading at $70.63, has shown robust momentum with a 19% gain over the past year, supported by 11 analysts revising their earnings estimates upward according to InvestingPro data.
The semiconductor firm delivered solid F2Q26 performance and provided third-quarter guidance that exceeded market expectations, prompting Needham to revise its outlook based on its discounted cash flow model. The company maintains a strong financial position with a healthy current ratio of 2.73 and more cash than debt on its balance sheet.
Ambarella has updated its fiscal year 2026 revenue growth forecast to 31%-35% year-over-year, a significant improvement from its previous guidance of 19%-25%, with the company citing both unit and average selling price growth supported by new program launches and an ongoing cyclical recovery. This outlook builds on the company’s impressive 57.91% revenue growth in the last twelve months. For deeper insights into Ambarella’s growth potential and comprehensive financial analysis, check out the detailed Pro Research Report available on InvestingPro.
The company’s Internet of Things (IoT) business continues to diversify beyond security cameras, with recent design awards in robotic aerial drones and edge AI infrastructure contributing to its expanding product portfolio.
According to Needham’s analysis, IoT will remain Ambarella’s primary growth driver until the company secures a major automotive design win, which management anticipates will occur around 2027-2028.
In other recent news, Ambarella reported impressive fiscal second-quarter results for 2025, with earnings per share reaching $0.15, significantly surpassing the anticipated $0.05. The company’s revenue also exceeded expectations, totaling $95.5 million against a forecast of $90 million. This performance was driven by strong demand in its Edge AI applications, particularly the adoption of its 5nm system-on-chips (SoCs). Rosenblatt Securities responded by raising Ambarella’s stock price target to $100 from $95, maintaining a Buy rating due to the momentum in Edge AI growth. KeyBanc also reiterated its Sector Weight rating following the robust quarterly results and increased guidance for the third quarter, highlighting opportunities in the Internet of Things segment. Additionally, Summit Insights upgraded Ambarella’s stock rating from Hold to Buy, citing growth in the company’s computer vision system-on-chip products. The research firm noted that customer purchases accelerated ahead of potential tariff implementations, providing a short-term boost to the company’s performance. These developments underscore the company’s strong positioning in the semiconductor market.
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