Taking a Fresh Look at Ambarella (AMBA) Valuation After Recent Share Price Weakness

Recent performance and what is driving sentiment

Ambarella (AMBA) has been drifting lower over the past month, with the stock down about 19% and roughly flat over the past year, even as its AI focused chip story develops.

See our latest analysis for Ambarella.

That slide includes a 30 day share price return of minus 19.4 percent and a five year total shareholder return of minus 23.9 percent, a sign that enthusiasm around Ambarella’s AI roadmap is still bumping up against concerns about profitability and execution risk.

If you like the AI angle here but want a broader view of the space, this is a good moment to scan other high growth tech and AI stocks that might fit your strategy.

With shares lagging despite double digit revenue growth and a sizable discount to analyst targets, the key question now is whether Ambarella is quietly undervalued or whether the market is already pricing in its next leg of AI driven growth.

Most Popular Narrative Narrative: 28.2% Undervalued

With Ambarella last closing at 70.46 dollars versus a narrative fair value near 98 dollars, the story leans heavily toward mispriced edge AI potential.

The robust pipeline of new product launches and design wins in autonomous mobility (including automotive safety, ADAS, and telematics) are expected to realize significant long-term, high-volume opportunities, improving multi-year revenue visibility and supporting future revenue inflection points as OEM decision cycles play out.

Read the complete narrative.

Want to see how long term revenue expansion, margin uplift and a punchy future earnings multiple combine into that fair value target? The full narrative unpacks the math, step by step, and reveals the bold growth path needed to support this price.

Result: Fair Value of $98.09 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained IoT cyclicality or slower than expected automotive adoption could derail that growth arc and force a rethink on Ambarella’s valuation.

Find out about the key risks to this Ambarella narrative.

Another Angle on Valuation

While the narrative fair value paints Ambarella as undervalued, the price to sales lens tells a tougher story. At 8.1 times sales versus a 5.1 times industry average and a 5.4 times fair ratio, the stock screens costly, which raises the risk that sentiment, not fundamentals, is doing the heavy lifting.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Ambarella Narrative

If you want to dig into the numbers yourself and challenge this view, you can spin up a custom narrative in just minutes: Do it your way.

A great starting point for your Ambarella research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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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