Ambarella Explores Strategic Options, Including Potential Sale, Amidst Surging Edge AI Demand

Ambarella Inc. (NASDAQ:AMBA) is one of the best small cap AI stocks to buy according to analysts. On June 24, Bloomberg announced that Ambarella is reportedly exploring strategic options, including a potential sale. Bloomberg’s Ryan Gould and Dinesh Nair reported that the company is working with bankers and has reached out to potential buyers.

Ambarella designs chips primarily used in video recording, streaming, and ADAS for self-driving cars. Its technology focuses on edge AI processing and human vision applications, such as video security, electronic mirrors, drive recorders, driver/cabin monitoring, autonomous driving, and robotics.

Ambarella Explores Strategic Options, Including Potential Sale, Amidst Surging Edge AI Demand

Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process.

Potential buyers could include rival chip companies that are seeking to enhance their automotive portfolios or private equity firms. Ambarella last posted an annual profit in 2017 but is forecasting a 28% revenue growth in FY2025, driven by increasing demand for its edge AI products, which now account for 75% of its sales.

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

While we acknowledge the potential of AMBA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMBA and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.