Ambarella (AMBA) Stock Jumps 28% as Rosenblatt Calls It the Ultimate Physical AI Play

TLDR

• Ambarella (AMBA) stock surged 28% on Tuesday after Rosenblatt named it a top pick for H2 2026
• Analyst Kevin Cassidy called AMBA a “Physical AI pure play” with a $120 price target (~79% upside from Monday’s close)
• Ambarella reported record fiscal 2026 revenue, with Edge AI products making up ~80% of its business
• The company signed a long-term deal with Hanwha Group worth up to $800 million over 10+ years
• Street consensus is Moderate Buy, with an average price target of $101.56, implying ~18% upside

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Ambarella (AMBA) stock surged 28% on Tuesday after Rosenblatt Securities named it a top technology pick for the second half of 2026. The stock closed at roughly $86 before the call, with Rosenblatt’s $120 price target implying approximately 79% upside from Monday’s closing price.

Ambarella, Inc., AMBA

The move adds to a strong three-month run. AMBA has already climbed 74% over that period, making Tuesday’s jump one of the more eye-catching single-day moves in the semiconductor space this year.

Rosenblatt analyst Kevin Cassidy, who ranks in the top 1% of Wall Street stock experts, called AMBA a “Physical AI pure play.” He picked it as his top name heading into the back half of the year.

The thesis is straightforward: AI is moving off the cloud and onto devices. Cameras, robots, drones, autonomous vehicles, and industrial machines all need to process AI locally. That’s Ambarella’s market.

Ambarella’s chip architecture is built for exactly that. Its AI SoCs deliver 50 to 500 TOPS of performance at under 5 watts — a key spec for running large models at the network edge without draining power.

Edge AI Is Already Driving Revenue

The company isn’t just pitching a future story. Ambarella reported record fiscal 2026 revenue, with Edge AI products accounting for roughly 80% of total business. That’s a meaningful shift from where the company was just a few years ago.

On the process node side, Ambarella has 5nm Samsung SoCs already in volume production, a 4nm CV7 expected to ramp next year, and a 2nm CV8 targeted for 2028. The company has also landed a long-term deal to build a semi-custom ASIC for a customer’s complex AI workloads, with management targeting at least $100 million in revenue from custom and semi-custom SoC products.

Cassidy argues that rising costs for advanced semiconductor wafers are pushing more companies away from building chips in-house, sending them back toward merchant chip vendors like Ambarella. He sees this as a major structural shift that the market hasn’t fully priced in.

The Hanwha Deal

The headline business development is a long-term agreement with Korean conglomerate Hanwha, covering security cameras, robotics, drones, healthcare, and industrial automation.

The deal spans over 10 years and represents a potential revenue opportunity of up to $800 million, though that figure is not guaranteed. Cassidy expects the arrangement to start contributing revenue upside next year as Hanwha transitions fully to Ambarella for its security camera chips — potentially adding around $50 million in that segment alone.

Ambarella does carry execution risks. Rising R&D and operating costs could pressure results if expected design wins don’t materialize on schedule. The company also faces customer and geographic concentration risks.

Wall Street overall is constructive. AMBA carries 6 additional Buy ratings and 4 Holds for a Moderate Buy consensus. The average price target sits at $101.56, implying roughly 18% upside from current levels.

By 2028, analysts project Ambarella could generate around $526.3 million in revenue and $74.3 million in earnings, requiring annual revenue growth of approximately 14.8%.

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