Ambarella wins price target raise at Roth

Roth Capital Markets analyst Suji Desilva raised his price target for Ambarella (Ambarella Stock Quote, Chart, News, Analysts, Financials NASDAQ:AMBA) to $85 from $65 while maintaining a “Neutral” rating in an Aug. 29 report, following stronger-than-expected second-quarter results and guidance.

Santa Clara, California–based Ambarella develops low-power system-on-a-chip semiconductors for AI processing, imaging, and video applications in security, automotive, consumer, and industrial devices.

For the fiscal second quarter of 2026 (ended July), Ambarella reported revenue of $95.5-million, up 2.2% sequentially and 58% year over year, ahead of consensus. Growth was led by Internet of Things and Edge AI programs. Gross margin was 60.5%, down 150 basis points sequentially but within the company’s long-term range. EPS was $0.15, topping expectations by $0.10, reflecting operating leverage on the revenue beat.

Guidance for the fiscal third quarter calls for revenue of $100 to $108-million, a 5%–13% sequential increase and well above consensus of $91-million.

Desilva said the outlook reflects “ramping growth in multiple edge IoT opportunities which garner favourable ASP uplift.”

Ambarella also raised its full-year fiscal 2026 guidance to growth of 31%–35% year over year, compared with prior guidance of 20%–25%.

“We are encouraged that revenue mix is trending toward newer non-auto edge AI applications, where AMBA is positioned for multi-quarter growth,” Desilva said. “We also believe the newer growth in edge AI applications is driving mix shift to newer higher ASP products, further boosting revenue growth.”

He added that while the company is benefiting from design wins and building momentum in Edge AI, “current levels embed the recovering growth opportunity for AMBA,” supporting his decision to maintain a neutral rating.

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