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Investing.com -- Ambarella, Inc. (NASDAQ:AMBA) shares surged 20% after the edge AI semiconductor company reported second-quarter earnings that significantly exceeded analyst expectations, driven by strong demand for its AI processors.
The company reported adjusted earnings of $0.15 per share for the second quarter, tripling the analyst consensus of $0.05. Revenue jumped to $95.5 million, beating the $90 million estimate and representing a 49.9% increase YoY from $63.7 million. The stock’s dramatic rise reflects investors’ enthusiasm for Ambarella’s strengthening position in the growing edge AI market.
"We are experiencing strong secular growth in the edge AI market, with an expanding breadth of applications driving unit demand, often with our higher priced 5nm AI SoCs," said Fermi Wang, President and CEO of Ambarella. "For example, a variety of portable AI video applications have reached production status, and by the end of fiscal 2026 we expect to realize production shipments from our first robotic aerial drone win."
Looking ahead, Ambarella provided upbeat guidance for the third quarter, projecting revenue between $100 million and $108 million, well above the consensus estimate of $91.13 million. The company also raised its fiscal 2026 revenue growth estimate to a range of 31% to 35%, which would represent approximately $379 million at the midpoint.
The company’s non-GAAP gross margin for the quarter was 60.5%, compared with 63.3% in the same period last year. Ambarella expects third-quarter non-GAAP gross margin to be between 60.0% and 61.5%.
With more than 36 million edge AI processors shipped to date, Ambarella has established itself as a market leader in the edge AI space, particularly in applications such as video security, advanced driver assistance systems, and autonomous driving technologies.