The company is optimistic about its growth prospects, with analysts maintaining bullish ratings and price targets around 10% above current levels, reflecting growing investor confidence.

Ambarella reported a strong Q2 FY2026 with nearly $96 million in non-GAAP revenue, up nearly 50% year-over-year, surpassing guidance, and raising its full-year revenue forecast to 31-35%, driven by broad-based edge AI applications and rising ASPs.

Ambarella plans to hold a conference call to discuss its results, highlighting its leadership in edge AI solutions used across various applications, including automotive, security, and robotics.

Despite a slight decrease in GAAP gross margin to 58.9%, the company improved net loss figures and increased cash and securities to over $261 million, demonstrating financial resilience.

CEO Fermi Wang emphasizes that the company's hardware architecture supports multiple markets, including IoT and automotive, with upcoming production shipments from new wins like robotic drones and edge infrastructure expected to boost FY2026 revenue.

Ambarella continues to solidify its leadership in edge AI processing, having shipped over 36 million processors to date, supporting diverse markets such as robotics, automotive safety, enterprise security, and smart home, with new applications in portable AI video, drones, and infrastructure on the horizon.

The company's growth is driven by production shipments from recent AI product wins, including robotic aerial drones and edge infrastructure, with these products expected to enter production in FY2027, expanding their market reach.

Revenue growth is balanced between unit volume and ASP increases, with both contributing roughly 50%, aided by the adoption of higher-priced HAI SoCs, which enhances the company's value proposition.

Over 75% of revenue comes from IoT, especially portable video applications like action and body-worn cameras, with IoT growth outpacing automotive, which is growing in the mid-single digits, thanks to a unified hardware architecture that boosts operational efficiency.

Ambarella's revenue growth is driven by broad momentum in edge AI applications, with a focus on IoT, automotive, robotics, and infrastructure markets, and the company continues to leverage its hardware/software platform for rapid innovation.

Ambarella’s increasing ASPs and shipment volumes demonstrate expanding value and pricing power, contributing to revenue and margin resilience in FY2026.

Major customer wins include the first edge AI infrastructure SoC (N1655), and collaborations with companies like Insta360, Honeywell, and Sensera, expanding Ambarella’s reach into robotics, security, and automotive markets.

The industry-wide shift toward edge computing is fueling demand across sectors like automotive and security, paving the way for advancements such as driverless cars and smarter surveillance.