Ambarella stock price is up more than 27.4% today. Is this jump short-lived or is it now the time to buy its stock?

In the stock market today, Ambarella (AMBA) is one of the main market movers. The company seems to be finally reaping the benefits of its investment in Artificial Intelligence of Things (AIoT) as about 90% of its revenues come from automotive and security applications of its products. 

What Is Ambarella?

Ambarella is a semiconductor design company that manufactures products used in different applications, including autonomous driving, electronic mirror, video security, and robotics. 

Should I Buy Ambarella Today?

Ambarella claims that its massive investments in artificial intelligence are finally lucrative, beating the market expectations after releasing its earnings report. Investors embraced the news while watching its stock soaring – Ambarella increased from $99.1 to $131.6 in only five days (33.16%). 

However, there’s always a catch. The company released the better-than-expected results without using the generally accepted accounting principles (GAAP), so the business ended up losing $0.20 per share this quarter, as opposed to the pro forma results which showed earnings of $0.35 per share (with $0.25 per share expected). 

What actually seems to make investors happy is its strong revenue growth – both for this quarter and the forecast figures. Although the company is still far from making a profit, the company expects to reach $88-$92 million in revenues next quarter, which is much higher than analysts’ forecast of only $79 million. 

Ambarella Price Prediction 2021

Despite the mixed news, analysts and Wall Street seem to consider Ambarella a great investment choice. An investment bank, Craig-Hallum, expects the company’s stock price to reach $170 in the next 12 months. Five analysts raised their price targets on this stock following the earnings release.