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what it is
Ambarella makes chips and software that help cameras and vehicles see, record, and analyze video at the edge.
how it gets paid
Last year Ambarella made $285M in revenue. Asia was the main engine at $242.3M, or 85% of sales.
why it's growing
Revenue grew 25.8% last year. The key number was $100.9 million in Q4 revenue because it showed 20% growth and supported higher full-year estimates.
what just happened
Ambarella posted $0.13 EPS, beating the $0.11 estimate, with Q4 revenue of $100.9 million.
At a glance
B balance sheet — gets the job done, barely
15/100 earnings predictability — expect surprises
85.9x trailing p/e — you're paying up for this one
14.0% return on capital — nothing to write home about
xvary composite: 39/100 — weak
What they do
Ambarella makes chips and software that help cameras and vehicles see, record, and analyze video at the edge.
Ambarella sells the full stack: silicon, image processing, and AI software. That matters because your customer can build one camera or car system around one vendor instead of stitching together multiple parts. Fiscal 2025 revenue was $285 million, and gross margin was 59.5%, which says the product is specialized enough to avoid commodity-chip pricing.
How they make money
$285M
annual revenue · their business grew +25.8% last year
Asia
$242.3M
Europe
$22.8M
North America
$20.0M
Other
$0.0M
The products that matter
computer vision semiconductor design
video & AI chips
$285M revenue · 100% of the business
It is the entire company. Q4 revenue reached $100.9M and edge AI demand in automotive, IoT, and robotics helped drive 20% growth from a year ago. If those design wins keep converting, the recovery case lives. If they stall, there is nowhere else to hide.
all revenue
Key numbers
$500M
FY2027 sales est
Projected revenue is $500 million versus $285 million trailing. That 75% gap is what the current story needs to justify the stock.
44.4%
operating margin
Operating margin → profit after running the business → so what: the company is still losing money on operations despite better sales.
85.9x
trailing p/e
Price-to-earnings → how much you pay for each dollar of profit → so what: you are paying a growth multiple for a business still proving its earnings base.
59.5%
gross margin
Gross margin → money left after making the product → so what: the chips are differentiated enough that the problem is scale, not basic pricing power.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 4 — safer than 20% of stocks
- price stability 10 / 100
- net profit margin 20.5% — keeps 20 cents of every dollar in revenue
- return on equity 14% — $0.14 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in AMBA 3 years ago → it's now worth $6,620.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Ambarella posted $0.13 EPS, beating the $0.11 estimate, with Q4 revenue of $100.9 million.
Quarterly revenue rose 20% vs. prior year, and management finished fiscal 2025 with better-than-expected results. Updated estimates now point to fiscal 2026 revenue of $440 million and EPS of $0.75.
$100.9M
revenue
$0.13
eps
59.5%
gross margin
the number that mattered
The key number was $100.9 million in Q4 revenue because it showed 20% growth and supported higher full-year estimates.
-
ambarella closed out fiscal 2025 (ended january 31st) with good results.
-
fourth-quarter revenues of $100.9 million were modestly higher than our estimate and increased 20% compared to the previous-year tally.edge ai products continued to drive the advance, largely due to robust demand from automotive, internet of things (iot), and robotics markets.
-
share earnings of $0.13 were $0.02 higher than the prior-year figure of $0.11.the bottom line benefited from the increase in volumes, improved operating leverage, higher average selling prices, and a favorable product mix. these factors more than offset a large increase in cost of revenues associated with more complex chip designs.
-
we have raised our fiscal 2026 top- and bottom-line estimates by $10 million and a dime per share, respectively, to $440 million and $0.75.
-
management looks for april-quarter revenues to be between $97 million and $103 million, implying a 16% vs. prior year increase at the midpoint.
source: company earnings report, 2026
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What could go wrong
the #1 risk is edge AI design wins failing to turn a $440M revenue estimate into actual revenue.
med
single-engine revenue story
All $285M of revenue comes from one chip business. If automotive, IoT, or robotics customers delay programs, the whole model feels it at once.
Impact: there is no second segment to offset a miss.
med
margin volatility
The page shows a 16.5% operating margin and a recent quarter at -41.1%. That gap tells you cost structure and mix still move around a lot.
Impact: better revenue can still produce ugly earnings when design complexity pushes costs higher.
med
valuation compression
At 85.9x trailing earnings, AMBA does not need disaster to fall. It just needs the recovery to look slower than expected.
Impact: when the multiple is this rich, even ordinary disappointment gets treated like bad news.
med
institutional sponsorship softening
103 institutions bought while 120 sold last quarter. That is not a collapse in ownership, but it does mean more funds trimmed than added.
Impact: weaker sponsorship makes volatile earnings reactions even more violent.
With 100% of revenue tied to one business line and earnings predictability at 15/100, AMBA does not get small misses. It gets narrative checks.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next quarter versus the $97M–$103M guide
That range is the first reality check on whether a path from $285M to $440M is credible or just spreadsheet optimism.
metric
margin cleanup
Watch whether results start looking more like the 16.5% operating margin profile and less like the recent -41.1% quarter.
trend
institutional flow
Last quarter showed 103 buyers versus 120 sellers. You want that balance to stop leaning the wrong way.
risk
edge AI adoption outside the slide deck
Automotive, IoT, and robotics drove 20% growth in q4. The question now is whether those end markets keep ordering, not just talking.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think this is still a prove-it stock over the next 12 months.
risk profile
below average
stability score 4 — this stock swings more than most, and the 10 / 100 price stability score says that is normal here.
chart momentum
average
technical score 3 — there is no special signal in the chart right now. The fundamentals will have to do the talking.
earnings predictability
15 / 100
Translation: quarterly numbers have a habit of surprising people, and not always in the fun direction.
source: institutional data
Institutional activity
103 buyers vs. 120 sellers in 4q2025. total institutional holdings: 36.1M shares.
source: institutional data
Price targets
3-5 year target range
$35
$109
$53
current price
$72
target midpoint · +35% from current · 3-5yr high: $150 (+180% · 30% ann'l return)
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