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Ambarella (AMBA), Quanta Tie Up for Next-Generation AI Products

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Ambarella (AMBA - Free Report) has entered into a collaboration with the Taiwanese electronics manufacturer, Quanta Computer. This collaboration will leverage Ambarella’s CV3-AD, CV7 and N1 series artificial intelligence (AI) systems-on-chip (SoCs) and Quanta’s AI Box and PCIe add-in cards to introduce next-generation AI-based products.

Ambarella's newly launched N1 series AI SOCs aim to bring generative AI into edge endpoint devices and on-premise hardware. These SOCs operate on multi-modal large language models (LLMs) and have the capability to support up to 34 billion parameters.

AMBA’s CV3-AD685 was launched in January 2023. It utilizes a powerful and energy-efficient AI neural vector processor for efficient neural network processing. This processor is upgraded to handle the newest neural network types, such as transformer networks. Moreover, the CV3-AD685 features a specialized general vector processor optimized for computer vision tasks, with specific improvements designed for high-definition radar processing.

Through this recent venture, Ambarella and Quanta will enable their partners across various industries to benefit from AI-based products that function on minimum power usage and enable improved data management efficiency. These industries include healthcare, autonomous vehicles, smart surveillance and robotics. Additionally, the collaboration will also expand the mutual capabilities in leveraging LLMs and neural networks.

Ambarella is leading the System-on-chip industry with its highly configurable SoCs that are cost-effective, power-efficient and known for their high-performance video processing. The company also continues to make strides with its other SoCs, including CV3, CV2, CV5, CV25 and CV22 SoCs based on CVFlow architecture. Its differentiated products have given it an advantage in niches like wearable cameras, IP cameras, automotive dashboard cameras and drone camera makers.

Nevertheless, the company is presently dealing with some short-term challenges. Over the past few quarters, there has been a decline in demand within specific market segments. The situation has been exacerbated by customers reducing their inventory. These challenges are anticipated to persist in the foreseeable future, affecting the company's financial performance in the near term.

Zacks Rank and Stocks to Consider

Currently, Ambarella carries a Zacks Rank #3 (Hold). Shares of AMBA have declined 31.8% in the past year.

Some better-ranked stocks from the broader technology sector are Kanzhun (BZ - Free Report) , BlackLine (BL - Free Report) and Camtek (CAMT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Kanzhun's fourth-quarter 2023 earnings per share has been revised upward by 4 cents to 16 cents in the past 60 days. Shares of BZ have plunged 36.7% in the past year.

The Zacks Consensus Estimate for BlackLine’s fourth-quarter 2023 earnings has been revised by a penny northward to 55 cents per share in the past seven days. Shares of BL have lost 20.6% in the past year.

The Zacks Consensus Estimate for Camtek’s fourth-quarter 2023 earnings has remained unchanged at 52 cents per share for the past 90 days. Shares of CAMT have rallied 187.7% in the past year.


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