AMBA – Ambarella (AMBA) Stock Jumps 8.3%: Will It Continue to Soar?

Ambarella (AMBA Free Report) shares soared 8.3% in the last trading session to close at $77.74. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock’s 17.8% gain over the past four weeks.

The edge AI semiconductor company is set to report its first-quarter fiscal 2024 results on May 30. It is currently benefiting from its transition to a video-artificial intelligence (AI) company. Ambarella expects fiscal first quarter revenues between $60 million and $64 million. Improvement in the security-camera business and solid demand for artificial intelligence vision silicon products are likely to aid in its top line growth.

This video-compression chipmaker is expected to post quarterly loss of $0.20 per share in its upcoming report, which represents a year-over-year change of -145.5%. Revenues are expected to be $62.12 million, down 31.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Ambarella, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock’s price usually doesn’t keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AMBA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>

Ambarella belongs to the Zacks Electronics – Semiconductors industry. Another stock from the same industry, Transphorm, Inc. (TGAN Free Report) , closed the last trading session 9.9% higher at $4.23. Over the past month, TGAN has returned 37%.

For Transphorm, Inc., the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.13. This represents a change of -62.5% from what the company reported a year ago. Transphorm, Inc. currently has a Zacks Rank of #3 (Hold).