Ambarella-Prediction: This Artificial Intelligence (AI) Chip Stock Will Soar Higher After Feb. 26 (Hint: It's Not Nvidia)

Core Viewpoint - Ambarella has significantly outperformed Nvidia in stock appreciation over the past six months, with a 64% increase compared to Nvidia's 13% [1] Company Performance - Ambarella is set to announce its fiscal 2025 fourth-quarter results on February 26, which are expected to exceed Wall Street's expectations due to strong demand for AI-enabled edge devices [3][8] - The company reported a 63% year-over-year revenue increase in the third quarter of fiscal 2025, achieving record levels of AI revenue and a non-GAAP profit [7] - For fiscal Q4, Ambarella has guided for revenue of $78 million, representing a 51% increase from the previous year, with analysts projecting a smaller loss per share compared to the prior year [8] Market Demand and Growth Potential - The demand for AI-enabled edge devices is anticipated to grow rapidly, with the edge AI hardware market's revenue expected to more than double in the next five years [5] - Ambarella's revenue in fiscal Q3 was driven by edge AI applications, with 70% of revenue coming from this segment, primarily from automotive and AI-based IoT applications [9] - The company forecasts its serviceable market to grow from approximately$ 5 billion in fiscal 2024 to nearly $9 billion by 2027, aiming for 23% growth in fiscal 2025 [10] Profitability Outlook - Analysts expect Ambarella to become profitable on a non-GAAP basis in the next fiscal year, indicating a positive trend in the company's bottom line [11] - The market may respond favorably to improvements in Ambarella's profitability, with a 12-month price target of$ 95 suggesting potential gains of 22% from current levels [12]