The analyst predicts Ambarella (AMBA) will be steamrolled by competitors and expresses a bearish stance, indicating a pass on the stock.
Ambarella has underperformed historically with lackluster revenue growth and leadership changes; competitors with vertical integration and LLM-based chip design expertise will outperform AMBA.
I did a quick due diligence on $AMBA. I like the company a lot from 2020. They were the primary chip maker for GoPro. GoPro faced a lot copycats, and so went the fortune for both GoPro and AMBA. They specialize in video processing. > UP 22% on no news > Historical underperforming. > Lackluster revenue growth > Leslie Kohn / Co founder, primary chip designer stepped down as part-time CTO role. > Fermi Wang CEO is stepping up. > Interesting new CNN based (like LLM) chips coming out. My take: I think the turnaround is a little too late. They should be well positioned well by this stage of the game. $CRBS and Groq are examples of well positioned. They sat on their butt for the last 5 years not accomplishing much. My prediction $nvda, qualcomm, AMD, and intel's mobileeye will steamroll them with their vertical integration and expertise in LLM-based chip design. BIG PASS!
| Horizon | Raw move | vs SPY |
|---|---|---|
| 1 day | +3.0% | +3.1% |
| 1 week | -16.3% | -16.4% |
| 1 month | -13.6% | -13.0% |
| 3 months | — | — |
| 6 months | — | — |