Rosenblatt Securities reiterated its Buy rating on Ambarella Inc. on Wednesday, maintaining a $120 price target as the AI-focused chip designer prepares to report second-quarter fiscal 2027 earnings on September 3.
The firm’s rating follows a 28% year-over-year revenue increase over the last twelve months and comes amid growing investor speculation about Ambarella’s strategic options, including potential acquisition interest from NXP Semiconductor, according to a Financial Times report cited by Rosenblatt. The analyst expects management to refrain from commenting on such discussions during the earnings call.
Ambarella’s market capitalization stands at approximately $3.1 billion, with options-implied volatility suggesting a potential 14% stock move around the earnings release. Historically, the company has exceeded options-implied moves in five of its past eight earnings reports.
Rosenblatt’s bullish outlook is supported by Ambarella’s expanding customer base for its 5nm Edge AI system-on-chip designs, which have gained traction in higher-volume production over the past two years. The company’s 4nm and 2nm SoCs lead in performance per watt, while its embedded SRAM-based CV architecture reduces system DRAM requirements. Ambarella has also streamlined developer onboarding with its Cooper SDK, enabling existing applications to migrate to its chips in days or weeks rather than months.
Other analysts have also expressed confidence in Ambarella’s near-term prospects. Stifel reiterated a Buy rating with a $106 target, estimating second-quarter revenue at $108 million—a 7.6% sequential increase and a 13.1% year-over-year rise. Northland maintained an Outperform rating with a $101 target.
At Rosenblatt’s 6th Annual Age of AI Technology Summit, Ambarella’s Customer Growth Officer Muneyb Minhazuddin emphasized that edge AI adoption will scale across fragmented verticals rather than hinging on a single dominant application. Northland noted that rising AI infrastructure costs and data privacy concerns are pushing enterprises toward on-premises AI workloads, a trend that could benefit Ambarella’s edge computing solutions.
Eight analysts have revised earnings estimates upward for the upcoming period, with Rosenblatt anticipating a potential beat-and-raise scenario in Ambarella’s earnings report.
