Why Ambarella (AMBA) Is Down 5.1% After Raising Record Edge AI Revenue Growth Guidance – And What's Next

• In November 2025, Ambarella, Inc. reported third-quarter sales of US$108.45 million with a reduced net loss of US$15.11 million, and for the first nine months sales reached US$289.84 million with a net loss of US$59.43 million, while also guiding fourth-quarter revenue to US$97.0–US$103.0 million.
• The company raised its full-year F2026 revenue growth guidance to a projected record range of 36%–38%, signaling management’s increased confidence in demand for its edge AI and video processing solutions despite remaining losses.
• We’ll now examine how Ambarella’s raised full-year revenue growth guidance could reshape its edge AI-led investment narrative and risk profile.

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Ambarella Investment Narrative Recap

To own Ambarella, you need to believe its edge AI and video processing chips can eventually support a sustainable, higher-margin business despite continued losses and heavy investment. The raised F2026 revenue growth guidance and solid Q3 results support the near term growth catalyst in edge AI, but they do not remove key risks around ongoing unprofitability and Ambarella’s exposure to cyclical IoT and concentrated customers.

The most relevant update here is Ambarella’s lift in full-year F2026 revenue growth guidance to 36%–38%, pointing to stronger-than-expected demand for its edge AI products. This directly reinforces the catalyst of expanding AI SoC adoption, while also raising the stakes on execution risk if design wins or end markets soften, given the company’s increasing R&D and operating expenses.

Yet investors should also be aware that heavy IoT dependence and customer concentration could quickly change the picture if...

Read the full narrative on Ambarella (it's free!)

Ambarella's narrative projects $526.3 million revenue and $74.3 million earnings by 2028.

Uncover how Ambarella's forecasts yield a $98.09 fair value, a 40% upside to its current price.

Exploring Other Perspectives

Seven fair value estimates from the Simply Wall St Community range widely between US$31.03 and US$105, showing how differently investors can size up Ambarella. You should weigh that diversity against the raised F2026 growth guidance and ongoing losses, and consider how much confidence you really have in its edge AI growth story.

Explore 7 other fair value estimates on Ambarella - why the stock might be worth less than half the current price!

Build Your Own Ambarella Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Ambarella research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Ambarella's overall financial health at a glance.

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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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