Ambarella: Edge AI proliferation, LTAs encouraging but revenue benefit longer dated

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Ambarella: Edge AI proliferation, LTAs encouraging but revenue benefit longer dated

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Ambarella

Edge AI proliferation, LTAs encouraging

but revenue benefit longer dated

Reiterate Rating: NEUTRAL | PO: 96.00 USD | Price: 91.84 USD

AI SoC roadmap supports LT pipeline and optionality 29 May 2026

AMBA reported largely in-line Q1 results with sales of $100.4mn and guided Q2 to mostly Equity

in-line, with both IoT and auto expected to grow. Full-year revenue guide of 10-15% is

unchanged. Elsewhere, AMBA announced an LTA with Hanwha with potential revenue in

Key Changes

excess of $800mn over 10+ years, beginning with standard edge AI products in enterprise/

physical security and potential to expand into a diverse array of other verticals and (US$) Previous Current

applications. We see this engagement as strategically useful beyond Hanwha, as AMBA Price Obj. 72.00 96.00

can reuse the broader AI SoC/platform across other customers while its semi-custom AI 2027E Rev (m) 439.6 439.7

programs could help create another path to monetize complex edge AI workloads on 2028E Rev (m) 481.9 483.0

advanced nodes like 2nm. Auto reached a new quarterly record, driven by commercial 2027E EPS 0.71 0.76

fleet telematics and safety. That said, we remain Neutral as many of the most compelling 2028E EPS 0.93 0.94

opportunities remain farther out with larger volumes for Hanwha still 1+ year out along

with other ramps across edge infra, auto, robotics etc. There is also a lingering risk of Vivek Arya

Research Analyst

memory-led demand destruction in 2H which may have partially driven the lack of full- BofAS

year guidance raise. Our estimates remain mostly unchanged, but we raise our PO to $96 +1 646 855 1755 vivek.arya@bofa.com