- Ambarella Inc.’s (AMBA) stock fell 13.73% to $65.40 on Thursday, a $10.41 drop, despite Q4 earnings of $0.11 per share beating the consensus of a $0.02 loss by $0.13 and revenue rising 62.8% to $84.02 million, exceeding the $78.04 million estimate.
- Edge AI products drove over 70% of revenue, with 30 million processors shipped cumulatively, and the company ended fiscal 2025 with $250.3 million in cash, up from $226.5 million the prior quarter.
- Despite upbeat Q1 revenue guidance of $81-87 million against a $74.22 million consensus, tariff-related supply chain concerns for customers led to a cautious outlook for 2H26, impacting investor confidence.
Ambarella Inc. (AMBA), a $3.16 billion market cap innovator in low-power system-on-chip solutions, experienced a sharp 13.73% decline in its stock price, falling $10.41 to $65.40, despite a robust fourth-quarter earnings report for the period ending January 2025. The company delivered earnings of $0.11 per share, excluding non-recurring items, surpassing the consensus estimate of a $0.02 loss by $0.13. Revenue soared 62.8% year-over-year to $84.02 million, exceeding the $78.04 million expected, driven by strong demand for its edge AI products, which now constitute over 70% of total revenue. Yet, the market’s reaction suggests that optimism over these figures was overshadowed by cautious forward-looking commentary.
The company’s edge AI processors, with about 30 million units shipped cumulatively, underscore its leadership in AI inference and edge chipsets. President and CEO Fermi Wang highlighted this milestone, noting that fiscal 2025 closed with record quarterly and annual contributions from edge AI, reflecting positive momentum into the new year. Ambarella bolstered its financial position as well, with cash, cash equivalents, and marketable debt securities rising to $250.3 million, up from $226.5 million the prior quarter and $219.9 million a year earlier. This liquidity provides a solid foundation as the company navigates an evolving landscape.
Despite the beat-and-raise performance – Q1 revenue guidance of $81-87 million outpaces the $74.22 million consensus – Ambarella’s stock took a hit after management flagged potential supply chain disruptions for customers due to tariffs. While the company itself anticipates no direct impact, it acknowledged during the earnings call that some clients are reassessing their supply chains and demand elasticity. This uncertainty prompted a conservative outlook for the second half of 2026, tempering investor enthusiasm. The 62.8% revenue growth to $84.02 million and a shift to over 70% edge AI revenue highlight Ambarella’s technological edge, but today’s 14% dip reflects market sensitivity to external risks. As tariffs loom, Ambarella’s ability to sustain its trajectory will depend on its customers’ resilience and the broader semiconductor environment.
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