Ambarella Surges 21% on Strong Earnings, AI Chip Demand
The semiconductor firm beat revenue and profit estimates and raised its full-year forecast, citing momentum in the edge AI market.
Shares of Ambarella surged more than 21% in after-hours trading after the edge AI semiconductor company reported second-quarter financial results that significantly surpassed analyst expectations and raised its outlook for the full year.
The Santa Clara-based firm announced quarterly revenue of $95.5 million for the period ending July 31, a nearly 50% increase from the same quarter last year. The figure comfortably beat Wall Street’s consensus estimate of $91.81 million. The company reported a non-GAAP profit of $0.15 per share, a stark turnaround from a loss of $0.13 per share in the prior year and well ahead of the $0.05 per share analysts had predicted.
Buoyed by the strong results, Ambarella increased its fiscal 2026 revenue growth forecast to a range of 31% to 35%. It also provided a bullish outlook for the third quarter, anticipating revenues between $100 million and $108 million, which would represent a record for the company.
“We are experiencing strong secular growth in the edge AI market, with an expanding breadth of applications driving unit demand,” said Fermi Wang, President and CEO of Ambarella, in a statement. Wang noted that the company expects to see production shipments for its first robotic aerial drone win by the end of the fiscal year.
While the company posted a non-GAAP profit of $6.4 million, it recorded a GAAP net loss of $20.0 million. However, this was a significant improvement from a GAAP net loss of $34.9 million in the same quarter of the previous year, indicating a move toward greater profitability.
Analysts have been broadly positive on Ambarella, with a consensus “Moderate Buy” rating heading into the earnings announcement. The strong beat and upgraded guidance are likely to reinforce confidence in the company’s strategy of focusing on the growing market for AI-powered semiconductor applications in areas like video security, automotive systems, and robotics.