Ambarella (NASDAQ:AMBA) Sees Unusually-High Trading Volume Following Strong Earnings

Ambarella, Inc. (NASDAQ:AMBA) saw an uptick in trading volume on Friday following a better than expected earnings announcement. Approximately 851,793 shares were traded during trading, a decline of 33% from the previous session’s volume of 1,267,195 shares.The stock last traded at $59.93 and had previously closed at $63.38.

The semiconductor company reported $0.18 EPS for the quarter, topping the consensus estimate of $0.17 by $0.01. The firm had revenue of $108.12 million during the quarter, compared to the consensus estimate of $107.76 million. Ambarella had a negative return on equity of 10.94% and a negative net margin of 17.18%.The business’s quarterly revenue was up 13.2% on a year-over-year basis. During the same quarter in the previous year, the firm earned $0.15 earnings per share.

Key Headlines Impacting Ambarella

Here are the key news stories impacting Ambarella this week:

• Positive Sentiment: Ambarella reported fiscal Q2 revenue of $108.1 million, up 13.2% year over year and slightly above the $107.8 million consensus estimate. Non-GAAP EPS of $0.18 also exceeded expectations, while non-GAAP net income rose from $6.4 million to $8.2 million. Ambarella second-quarter fiscal 2027 financial results
• Positive Sentiment: Management said edge-AI revenue reached a record level, supported by its 5nm CV75 and CV72 AI systems-on-chip. The company also highlighted its upcoming X7 stand-alone AI Accelerator, which could expand its addressable market.
• Positive Sentiment: New long-term agreements with Macnica and Capgemini are intended to broaden Ambarella’s distribution, engineering and systems-integration reach across the Americas, EMEA and enterprise markets. Ambarella and Macnica distribution agreement
• Neutral Sentiment: Fiscal Q3 revenue guidance of $115 million to $124 million brackets the $119.3 million analyst consensus, indicating solid sequential growth but no significant forecast increase. Cash, cash equivalents and marketable securities totaled $272.3 million at quarter-end.
• Negative Sentiment: GAAP net loss remained at $6.7 million, and GAAP gross margin declined to 57.7% from 58.9% a year earlier. Non-GAAP Q3 gross-margin guidance of 59% to 60% also suggests continued near-term margin pressure.
• Negative Sentiment: Craig Hallum downgraded AMBA from “buy” to “hold” and set a $70 price target. Bank of America analyst Vivek Arya also maintained a hold view, citing elevated valuation and near-term margin uncertainty. The downgrade is likely the main catalyst behind the stock’s decline despite the earnings beat.

Analyst Ratings Changes

A number of research firms have weighed in on AMBA. Bank of America boosted their target price on shares of Ambarella from $72.00 to $96.00 and gave the stock a “neutral” rating in a research note on Friday, May 29th. Northland Securities set a $101.00 price objective on Ambarella in a report on Wednesday, June 17th. Stifel Nicolaus set a $106.00 price objective on Ambarella in a research report on Friday, May 29th. Rosenblatt Securities reaffirmed a “buy” rating and issued a $120.00 target price on shares of Ambarella in a report on Monday. Finally, Oppenheimer reissued a “market perform” rating on shares of Ambarella in a research note on Friday. Five analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, Ambarella has an average rating of “Hold” and a consensus price target of $94.22.

Insider Buying and Selling

In other news, insider Chan Lee sold 2,951 shares of the firm’s stock in a transaction dated Wednesday, June 17th. The stock was sold at an average price of $67.87, for a total transaction of $200,284.37. Following the completion of the transaction, the insider directly owned 157,098 shares in the company, valued at $10,662,241.26. This trade represents a 1.84% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO John Young sold 5,033 shares of the company’s stock in a transaction that occurred on Wednesday, June 17th. The shares were sold at an average price of $67.54, for a total value of $339,928.82. Following the completion of the sale, the chief financial officer owned 112,590 shares in the company, valued at $7,604,328.60. The trade was a 4.28% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 58,519 shares of company stock valued at $4,595,475. Corporate insiders own 4.50% of the company’s stock.

Hedge Funds Weigh In On Ambarella

A number of hedge funds have recently bought and sold shares of AMBA. Royal Bank of Canada boosted its position in Ambarella by 2.1% during the first quarter. Royal Bank of Canada now owns 64,744 shares of the semiconductor company’s stock valued at $3,258,000 after acquiring an additional 1,307 shares during the last quarter. Advisors Asset Management Inc. grew its holdings in Ambarella by 44.1% during the 1st quarter. Advisors Asset Management Inc. now owns 935 shares of the semiconductor company’s stock worth $47,000 after acquiring an additional 286 shares during the period. AQR Capital Management LLC raised its position in shares of Ambarella by 126.6% in the 1st quarter. AQR Capital Management LLC now owns 84,871 shares of the semiconductor company’s stock worth $4,272,000 after acquiring an additional 47,414 shares in the last quarter. Empowered Funds LLC raised its position in shares of Ambarella by 34.6% in the 1st quarter. Empowered Funds LLC now owns 6,838 shares of the semiconductor company’s stock worth $344,000 after acquiring an additional 1,758 shares in the last quarter. Finally, Intech Investment Management LLC lifted its stake in shares of Ambarella by 48.1% in the 1st quarter. Intech Investment Management LLC now owns 25,586 shares of the semiconductor company’s stock valued at $1,288,000 after purchasing an additional 8,306 shares during the period. Institutional investors own 82.09% of the company’s stock.

Ambarella Stock Performance

The business has a 50 day moving average price of $74.31 and a 200-day moving average price of $68.23. The company has a market capitalization of $2.67 billion, a price-to-earnings ratio of -37.86 and a beta of 2.09.

About Ambarella

Ambarella, Inc is a global semiconductor company headquartered in Santa Clara, California, specializing in video compression, image processing and computer vision technologies. The company designs low-power, high-definition system-on-chip (SoC) solutions that enable the capture, processing and streaming of video in a variety of embedded applications. Ambarella’s platforms combine advanced video encoding, multi-core central processing units and hardware accelerators to deliver high-resolution imaging with low power consumption.

Ambarella’s product portfolio caters to multiple markets, including security and surveillance, automotive vision, wearable cameras, drones and robotics.