Ambarella Q2 revenue rises 13.2%, guided for 10.5% Q3 growth amid expanding AI market opportunities

Ambarella reported a 13.2% year-over-year revenue increase to $108.1 million in Q2, with guidance indicating about 10.5% sequential growth in Q3. The company expanded its fiscal 2032 addressable market to $22.9 billion, driven by growth in robotics and edge infrastructure, broadening its opportunities in Physical AI. Memory shortages may benefit Ambarella's low-power architecture as customers shift away from GPU-heavy designs due to rising system costs. Despite strong free cash flow of $58 million in FY2026, $98 million in stock compensation raises concerns about shareholder economics. The analyst values the stock at $94 per share, with potential upside to $127 if Physical AI commercialization accelerates.