10 Best AI Stocks to Buy According to Analysts

5. Ambarella Inc. (NASDAQ:AMBA)

Number of Hedge Fund Holders: 38

Average Upside Potential as of September 12: 19.13%

Ambarella Inc. (NASDAQ:AMBA) is one of the best AI stocks to buy according to analysts. On August 29, Roth Capital raised the firm’s price target on Ambarella to $85 from $65, while keeping a Neutral rating on the shares. The company reported a solid beat and raise with growth from non-auto Edge AI applications, which supported the revenue momentum at Ambarella.

This sentiment came after Ambarella reported its financial results for FQ2 2026. The company saw strong financial growth, with revenue reaching $95.5 million, which was a 49.9% increase year-over-year and an 11.2% sequential increase. Ambarella’s cash and marketable securities increased by $1.8 million from the prior quarter to $261.2 million.

Ambarella is seeing strong demand for its 5-nanometer AI System-on-Chips/SoCs, which are driving higher average selling prices. The company’s edge AI applications are expanding into new markets such as portable video and robotic aerial drones. The automotive market’s adoption rate is slower with longer time-to-revenue, but the company continues to invest in both automotive and IoT sectors due to their similar hardware architecture.

Ambarella Inc. (NASDAQ:AMBA) develops semiconductor solutions that enable AI processing, advanced image signal processing, and HD and ultra-HD compression.