Chip stocks fall with Nvidia after data center rev disappointment
Investing.com - Stifel has maintained its Buy rating and $80.00 price target on Ambarella (NASDAQ:AMBA), highlighting the company’s strong position in edge AI inference processors. According to InvestingPro data, the stock has shown impressive momentum with a 44% return over the past year, though current analysis suggests the stock is trading above its Fair Value.
In a research note, Stifel expressed confidence that Ambarella is on track to meet the firm’s July quarter revenue estimate of $90.0 million, representing a 4.8% quarter-over-quarter increase. With earnings scheduled for August 28 and 11 analysts recently revising their earnings estimates upward, market expectations appear optimistic.
The research firm noted that demand for Ambarella’s edge AI inference processors remains robust, with the company’s design win pipeline supporting its near-term outlook.
Stifel suggested Ambarella could guide for sequential revenue growth in the fiscal third quarter of 2026, citing solid near-term visibility across both Automotive and IoT segments.
The $80 price target is based on an 8.2x CY26E EV/Sales multiple, with Stifel emphasizing that Ambarella is among the few small and mid-cap semiconductor stocks well-positioned to capitalize on Edge AI opportunities in coming years.
In other recent news, Ambarella reported its first-quarter fiscal year 2026 earnings, with revenue reaching $85.9 million, marking a 2.2% increase quarter over quarter. This surpassed Stifel’s estimate of $84.0 million, driven by strong performance in the Internet of Things (IoT) sector. Ambarella’s second-quarter fiscal year 2026 revenue guidance is projected at $90.0 million, indicating a 4.8% growth quarter over quarter and exceeding Stifel’s prior estimate by 6.1%. The company has also revised its fiscal year 2026 revenue growth outlook to approximately 22% at the midpoint, up from the previous mid- to high-teens percentage growth forecast.
In addition to earnings, Ambarella is reportedly exploring strategic options, including a potential sale, as per a Bloomberg report. The company has engaged bankers and reached out to potential buyers, which could attract interest from rivals in the chip industry. Analysts at Stifel have reiterated their Buy rating with an $80 price target, citing growth in AI vision processing solutions. Meanwhile, KeyBanc has maintained a Sector Weight rating, highlighting robust demand for edge AI technology despite some slowdown in the automotive sector.
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