Why a Fund Placed a $13 Million Bet on Ambarella Stock Before a 20% Post-Earnings Drop

6 days ago 7

Jonathan Ponciano, The Motley Fool

Fri, December 19, 2025 astatine 11:08 AM CST 5 min read

New York City-based S Squared Capital accrued its Ambarella holding by 35,000 shares successful the 3rd quarter.
The wide worth of the presumption accrued by astir $4.8 million.
As of quarter-end, the money reported holding 153,551 AMBA shares valued astatine $12.7 million, representing astir 4.8% of money assets.
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New York City-based S Squared Technology disclosed a bargain of 35,000 shares of Ambarella (NASDAQ:AMBA) successful a November 13 SEC filing, contributing to an summation successful its presumption of astir $4.8 million.

S Squared Technology reported the acquisition of 35,000 further shares of Ambarella (NASDAQ:AMBA), according to its November 13 SEC filing. The transaction accrued the fund's full Ambarella presumption to 153,551 shares valued astatine $12.7 cardinal arsenic of September 30. This marks an astir 1% summation successful the fund’s 13F reportable assets, bringing Ambarella’s weighting to astir 4.8% of portfolio AUM.

Top holdings aft the filing:

NASDAQ: LSCC: $25.4 cardinal (9.7% of AUM)
NASDAQ: KRYS: $19.3 cardinal (7.3% of AUM)
NASDAQ: SYM: $18.9 cardinal (7.2% of AUM)
NASDAQ: KTOS: $18.2 cardinal (6.9% of AUM)
NYSE: PRLB: $15.6 cardinal (5.9% of AUM)

As of Friday, Ambarella shares were priced astatine $71.73, up astir 4.5% implicit the past twelvemonth and good underperforming the S&P 500's astir 16% summation successful the aforesaid period.

Metric

Value

Market Capitalization	$3.1 billion
Revenue (TTM)	$373.9 million
Net Income (TTM)	($79.7 million)
Price (as of Monday)	$71.73

Ambarella develops system-on-a-chip semiconductor solutions for video compression, representation processing, and artificial intelligence, serving markets specified arsenic automotive cameras, information cameras, robotics, and user imaging devices.
The institution generates gross done the merchantability of integrated circuits and related solutions to archetypal instrumentality and plan manufacturers, leveraging exertion for high-definition video and AI processing.
Its main customers see automotive OEMs, information camera manufacturers, robotics companies, and user electronics brands operating globally.

Ambarella, Inc. is simply a starring supplier of precocious semiconductor solutions focused connected video, imaging, and AI processing. The institution leverages proprietary system-on-a-chip exertion to present high-performance, low-power solutions for automotive, security, and user instrumentality applications.

S Squared's further Ambarella shares were purchased earlier the company's late-November net report, which sent the banal down astir 20% contempt grounds gross and accelerating growth. That sequencing matters: The money was buying into the setup, not reacting to the selloff.

Ambarella reported third-quarter fiscal 2026 gross of $108.5 million, up 31% twelvemonth implicit year, with borderline AI gross hitting its sixth consecutive quarterly record. Non-GAAP net deed $11.9 million, portion escaped currency travel reached astir 15% of gross twelvemonth to date. Management besides raised full-year gross maturation guidance to arsenic overmuch arsenic 38%, an all-time precocious for the company.

Ultimately, it seems the stock’s absorption reflected caution astir near-term margins and fourth-quarter guidance, not a reversal successful demand. Ambarella exited the 4th with $295 cardinal successful currency and marketable securities, giving it ample runway to money R&D arsenic borderline AI adoption expands crossed automotive, security, and robotics markets.