1、 BofA Securities does and seeks to do business with issuers covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making the

2、ir investment decision.Refer to important disclosures on page 13 to 15.Analyst Certification on page 11.Price Objective Basis/Risk on page 11.12872317 Ambarella Edge AI strength offset by premium valuation,sub-scale business model Reiterate Rating:NEUTRAL|PO:90.00 USD|Price:70.63 USD Softer l-t grow

3、th despite n-t strength,raise PO to$90 AMBA delivered a strong beat/raise in its 2Q(JulQ)print driven by continued edge-AI strength with IoT up high teens sequentially to 77%of total revenue.Notably,AMBA raised its FY26E(CY25E)guidance by+9%to a midpoint of$379m after a 5%hike in 1Q AMBA continues t

4、o benefit from the rapid growth of edge AI,(80%of total revenue this year)within a greater$5bn edge AI SAM growing 18%CAGR to$12.9bn by 2030 across auto and IoT.AMBA have secured a high-volume autonomous aerial drone design win with HK-based Insta360,expected to be 10s of$mns over the products lifet

5、ime(ASP 2x AMBAs blended SoC ASP of$14).AMBA sees$200m aerial robotics SAM in FY26E with high-volume shipments into the robotics market expected by the end of the year.We raise FY26/27E sales+9%/+6%and raise our PO to$90(from$63)on 9x EV/S(6x prior),near the middle of AMBAs historical 4-19x trading

6、range.Reit.Neutral given strong pipeline and emerging edge AI opportunity offset by 1)sub-scale business model(stock at 18x/154x CY25/26 PE),2)hard to forecast design wins in fragmented,highly competitive IoT mkt.,3)limited traction on companys past goal of becoming a more impactful auto chip suppli