$AMBA dropped about 21% after earnings, but the report was not completely bad. Revenue and EPS slightly beat expectations, but the market is no longer looking only at growth. It is now looking at the profitability quality of that growth.


The company’s biggest problems are that despite revenue growth, margins remain under pressure, GAAP losses continue, cash outflow persists, inventory increased, and the SBC burden remains high.
On the other hand, the balance sheet is strong. The company has $277.7M in liquid assets, and because it has no debt, the short term financial squeeze risk looks low.
The Edge AI agreement with Hanwha, lasting more than 10 years and potentially generating over $800M in revenue, strengthens AMBA’s long term story in Physical AI, robotics, security cameras, industrial automation, and automotive AI.
It got rejected from the Supertrend again. For a rally, it needs to break above this resistance.
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