By Sam Boughedda
Wells Fargo analysts said in a note to investors that Ambarella's (NASDAQ:AMBA) first CV3 win is a "biggie."
Ambarella shares jumped over 13% Friday following the news.
Early this morning, Continental announced it will offer Advanced Driver Assistance Systems (ADAS) solutions based on the CV3 artificial intelligence system-on-chip (SoC) family from semiconductor company Ambarella, the analysts explained.
"In our view, this is a significant endorsement for Ambarella for two reasons, including 1) Continental is among the world's leading tier-one automotive sub-assembly suppliers into the automotive OEM market; and 2) this is the first announced design win for Ambarella's newest computer vision processor (CV3)," stated the analysts, who have an Overweight rating and $105 price target on Ambarella shares.
They added that the firm is uncertain as to which model-year vehicles Ambarella's CV3 may be designed into, but they presume the deal may affect Amberella's revenue way out into CY25.
"As we have said in the past, given Ambarella's small size, the company needs only one significant tier-one sub-assembly supplier (or OEM) to significantly move the needle for CV3 sales (and overall company sales). CV3 has been in the hands of potential customers for evaluation for only 4-5 months. Hence, there could be more wins coming. The Continental win is certainly a big endorsement," said the analysts.