Ambarella’s Q2 earnings and new AI partnerships
Ambarella (AMBA) just reported fiscal second quarter results, issued fresh revenue guidance, and announced new AI focused partnerships with Macnica and Capgemini, giving investors several data points to reassess the stock.
For the quarter ended July 31, 2026, Ambarella reported sales of US$108.13 million compared with US$95.51 million in the same period a year earlier. The company reported a net loss of US$6.69 million compared with a loss of US$20 million a year ago, with basic and diluted loss per share from continuing operations of US$0.15 versus US$0.47 previously.
Over the first six months of the fiscal year, sales were US$208.48 million compared with US$181.38 million a year earlier. Net loss for the period was US$24.78 million compared with US$44.32 million a year ago, with basic and diluted loss per share from continuing operations of US$0.57 versus US$1.05.
Alongside the historical results, Ambarella issued revenue guidance for the third quarter ending October 31, 2026. The company expects revenue in a range of US$115 million to US$124 million. Investors now have a near term revenue band to compare with the latest quarterly figure of US$108.13 million when evaluating Ambarella stock.
Even with the new AI partnerships and the fresh revenue outlook, Ambarella’s latest news has been followed by a sharp pullback. The 1 day share price return is down 5.60% and the 7 day share price return is down 10.93%, contributing to a 30 day share price return of down 22.92% and a year to date share price return of down 15.67% at a recent share price of US$63.38.
Over a longer horizon, the picture is more mixed. A 1 year total shareholder return of down 21.94% contrasts with a 3 year total shareholder return of 4.92% and a 5 year total shareholder return of down 56.69%. This suggests that recent selling pressure has picked up again even as Ambarella signs new AI focused agreements and gives investors clearer revenue guidance.
Press your advantage in edge AI by lining up Ambarella next to a hand picked group of 55 AI infrastructure stocks that are also tied to real-world deployment stories.After Ambarella’s latest drop and fresh AI agreements, investors are weighing whether the current price reflects temporary sentiment or a deeper reset. Does the risk reward now tilt toward patient buyers or caution.
Most Popular Ambarella Narrative: 46.4% Undervalued
Ambarella’s most followed narrative pegs fair value at about $118 per share, well above the recent close of $63.38, which frames today’s selloff in a very different light.
The market is only beginning to grasp the depth of Ambarella's penetration into next-wave edge AI verticals, such as portable video, robotics, and especially edge infrastructure; increased adoption here could create multiple independent long-term revenue streams, de-risking the business model and supporting multi-year earnings growth beyond traditional video and automotive cycles. Ambarella's unified hardware-software platform and developer ecosystem are now at a level where customer onboarding, design, and deployment cycles can be radically compressed, making Ambarella a default standard for a growing number of OEMs and enabling the company to capture increasing shares of the global shift to smart edge devices, translating to accelerating revenue and normalized net margin expansion.
Want to see what is baked into that almost doubled fair value? The narrative leans on brisk revenue compounding, a step change in margins, and a premium future earnings multiple. Curious how those ingredients combine to justify such a gap to Ambarella’s current share price.
Result: Fair Value of $118.20 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Ambarella’s story can change quickly if customer concentration at WT Microelectronics or rising edge AI competition begins to affect orders or pricing power.
Find out about the key risks to this Ambarella narrative.
Another Look at Ambarella’s Valuation
The first narrative leans on analyst forecasts and a higher fair value for Ambarella. A simpler price-based view tells a different story. At a P/S ratio of 6.9x, Ambarella trades richer than the US Semiconductor industry at 6.3x and the peer average of 4.3x, and also above its fair ratio of 5.4x. That gap points to less room for error if growth or margins fall short, so how comfortable are you paying up on sales for a company that is still loss making?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Mixed signals around Ambarella can make the story feel complex, so move quickly and test the numbers, risks, and upside yourself by weighing the 3 key rewards and 3 important warning signs.
Looking for more investment ideas beyond Ambarella?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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