Now is a fine time to be a developer of next-generation semiconductors, as the company’s latest quarterly numbers indicate.
Edge semiconductor designer Ambarella (AMBA 16.75%) barreled into the weekend on a high note, following its release of a fresh set of quarterly results. On a convincing double beat, the company’s stock was justifiably popular, with investors sending its price just about 17% higher in Friday’s trading session.
A vast improvement on the top line
For the second quarter of its fiscal 2026, Ambarella collected $95.5 million in revenue, improving that line item by almost 50% year over year. The company’s non-GAAP (adjusted) net income didn’t rise that dramatically, but it did see a robust increase of 16% to $6.4 million, shaking out to $0.15 per share.
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Analysts had significantly underestimated this growth potential. On average as a group, they were forecasting $90 million for revenue, and an adjusted, bottom-line profit of $0.05 per share.
Ambarella’s niche is the edge segment of the market, in which data and software are moved closer to the user’s base in order to speed up processing times. It has developed artificial intelligence (AI) solutions for edge computing, and given the current, near-insatiable demand for AI functionalities, that’s a fine business to be involved in just now.
In the company’s earnings release, it pointed out that it has so far shipped over 36 million edge AI processors.
Double-digit optimism
It was a beat-and-raise quarter for Ambarella, as the company lifted its guidance for full-year revenue. For the entirety of fiscal 2026 it’s now expecting its revenue to increase by 31% to 35% over the 2025 result; the midpoint of this range in dollar terms is around $379 million.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
