Ambarella grows 13.2% in Q2 FY2027, shifting to edge AI with new chips but faces profit and cash flow challenges.

Ambarella is transitioning from security camera chips to edge AI, expanding into automotive, robotics, and smart security with new 5nm chips and the X7 AI accelerator. In Q2 FY2027, revenue rose 13.2% to $108.1 million, driven by automotive and IoT sectors. However, profit growth lags and free cash flow remains negative, raising concerns. The stock trades at a high valuation of 77 times FY2027 earnings, with future growth dependent on successful product launches and partnerships with Capgemini and Macnica. Despite risks, a Buy rating is maintained with a 5-year investment horizon.

Following Ambarella's strategic shift towards edge AI and new product launches, its stock shows modest positive movement on Pluang. As of Oct 20, 2026 11:41 WIB, AMBA trades at USD 62.30, up 0.97% for the day, with a market cap of $2.72 billion. The stock remains well below its 52-week high of $95.51, reflecting ongoing market caution despite growth prospects.