Ambarella has recently drawn significant attention from several analysts, reflecting a complex combination of optimism and caution after a strong second-quarter performance. Bank of America adjusted its price target for Ambarella’s shares from $63 to $90 but maintained a Neutral rating, citing positive sales revisions and highlighting emerging opportunities in Edge AI. However, they also noted that weaknesses in the automotive sector might dampen overall growth prospects.
Roth Capital echoed similar sentiments by raising its target to $85 from $65 while keeping a Neutral stance. The firm acknowledged that growth from non-automotive Edge AI applications is gaining traction, which has contributed positively to short-term revenue but may limit expectations for substantial upside in the future.
Conversely, Summit Insights upgraded Ambarella to a Buy rating, pointing to the company’s expanding market potential in autonomous robotics and portable 360-degree cameras, which could pave the way for significant outperformance by fiscal 2027. Morgan Stanley lifted its target to $96, emphasizing that growth driven by edge-based AI applications outside the automotive field—such as portable video and drones—represents a key catalyst for future expansion.
Rosenblatt’s Kevin Cassidy raised Ambarella’s target to $100, citing strong product execution that pushed revenues beyond expectations, with anticipated momentum carrying into the next quarter. Likewise, Northland’s Gus Richard raised his price target to $95, referencing the company’s favorable Q2 results and contributions from IoT within the portable cameras and drones segment, while Needham’s Quinn Bolton also increased his target to $100, highlighting strong Q2 performance and diversification beyond security cameras.
The stock’s Fair Value estimate remains steady at $93.73 per share despite the recent upward revisions from analysts, indicating a balanced market assessment. This reflects confidence in Ambarella’s foray into new growth markets, particularly in IoT and Edge AI, while also acknowledging some ongoing challenges within the automotive sector.
Ambarella has also raised its full-year 2026 revenue growth forecast, now predicting a 31% to 35% increase, equating to approximately $379 million at the midpoint, showing increasing confidence in its business strategy and momentum. The company has set its third-quarter guidance with revenue expectations between $100 million and $108 million, aligning with the positive sentiment shared by various analysts.
Furthermore, Ambarella completed a minor share repurchase of nearly 50,000 shares as part of its ongoing buyback program, which began in 2019, indicating a commitment to maintaining shareholder value.
As analysts continue to weigh the implications of these developments, their insights point towards a cautious yet hopeful outlook for Ambarella. The company is navigating its transition to high-growth sectors while managing inherent risks, particularly in automotive markets. Investors will be keen to see how Ambarella continues to evolve in response to these challenges while capitalizing on growing opportunities across Edge AI and IoT sectors.