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On Thursday, Stifel analysts increased their price target on Ambarella shares (NASDAQ:AMBA), raising it to $100 from the previous $80, while maintaining a "Buy" rating on the stock. The revision reflects the company’s strong positioning in growth segments, particularly artificial intelligence (AI). According to InvestingPro data, the stock currently trades at $43.60, suggesting significant upside potential to analysts’ targets, which range from $49.60 to $110.
Ambarella’s CV5 and CV7 product families are expected to drive significant revenue growth, with projections indicating these products could account for approximately 50% of the year-over-year top-line growth in fiscal year 2026. Stifel’s current model anticipates a 17.3% year-over-year increase for that period, aligning with InvestingPro’s revenue growth forecast of 17% for FY26. The company’s presence in the Internet of Things (IoT) and automotive sectors is also expected to contribute to revenue growth in FY26E, building on its impressive 25.8% revenue growth in the last twelve months.
Stifel’s analysis suggests that Ambarella is one of the few small to mid-cap (SMID) semiconductor stocks with such a strong foothold in AI technology. The firm’s analysts believe that Ambarella’s strategic positioning could yield substantial returns for long-term investors. The potential for Ambarella to remain a robust organic entity or to become an attractive acquisition target was also highlighted in the commentary.
The endorsement from Stifel underscores the market’s optimism about Ambarella’s future performance, particularly in relation to its innovative AI-driven product lines. The increase in the price target reflects the confidence that the company is well-placed to capitalize on the growing demand for AI solutions within the semiconductor industry.
In other recent news, Ambarella reported its fourth-quarter fiscal year 2025 results, highlighting a revenue of $84.0 million, which surpassed Stifel’s estimate by 7.7%. The company also reported a non-GAAP earnings per share of $0.11, exceeding Stifel’s projection of a $0.02 loss per share. Ambarella’s revenue for the upcoming first quarter of fiscal year 2026 is expected to remain steady at $84.0 million, marking a 13.4% increase over previous estimates. Needham analysts raised their price target for Ambarella shares to $110, citing the company’s strong financial performance and a positive outlook for fiscal year 2026. They anticipate mid- to high-teen percentage revenue growth, driven by the CV5 and CV7 product families. Meanwhile, KeyBanc maintained a Sector Weight rating on Ambarella, recognizing the company’s robust results and optimistic guidance but adopting a cautious stance due to potential tariff impacts. Additionally, Ambarella appointed Chantelle Breithaupt as an independent director to its board, enhancing its governance structure. The company also approved a Fiscal Year 2026 Annual Bonus Plan, increasing the bonus pool by 19% compared to the previous year.
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