Why Ambarella, Inc. (AMBA) Went Down on Thursday

We recently compiled a list of the 10 Stocks Drop by Double Digits Mostly Due to Disappointing Earnings. In this article, we are going to take a look at where Ambarella, Inc. (NASDAQ:AMBA) stands against the other stocks.

Wall Street’s main indices suffered a bloodbath on Thursday as overall investor sentiment was weighed down by President Donald Trump’s series of tariffs on goods from other countries.

The Dow Jones dropped by 0.45 percent, while the S&P declined 1.59 percent. Nasdaq, on the other hand, lost 2.78 percent.

On Thursday, Trump threatened to slap EU products with a 25-percent tax, following his announcement on Wednesday of another month of delay for the imposition of taxes on goods from Mexico and Canada.

Ten companies also mirrored wider market pessimism, posting double-digit declines, albeit the drop was predominantly due to dismal earnings performance last year.

To come up with Thursday’s worst performers, we considered only the stocks with $2 billion in market capitalization and $5 million in daily trading volume.

A scientist in a lab coat and goggles operating a state-of-the-art semiconductor production line.

Ambarella, Inc. (NASDAQ:AMBA)

Ambarella, Inc. (NASDAQ:AMBA) fell by 17.13 percent on Thursday to end at $62.83 apiece as investors shunned news of impressive earnings performance last year.

In its latest earnings release, Ambarella, Inc. (NASDAQ:AMBA) narrowed its net loss in three months ended January 2025 to $20.2 million from $60.6 million in the same period a year earlier, helped by a 63-percent higher revenue of $84 million versus $51.6 million year-on-year.

Net loss for the full year also shrunk by 30.7 percent to $117 million from $169 million year-on-year, while revenues increased by 26 percent to $284.8 million from $226 million in 2023.

Ambarella, Inc. (NASDAQ:AMBA), a semiconductor company, also earned a higher price target of $110 from Needham & Company LLC versus the $100 previously. It also maintained a “buy” rating for the company.

Overall AMBA ranks 2nd on our list of Thursday’s worst performers. While we acknowledge the potential of AMBA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as AMBA but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.