An Ambarella Insider Just Sold 7,728 Shares. Here’s What Investors Should Know

On Jan. 5, Ju Chi-Hong, a senior vice president at Ambarella, Inc. (NASDAQ:AMBA), executed an open-market sale of 7,728 shares of the company, according to an SEC Form 4 filing.

Transaction summary

Transaction value based on SEC Form 4 reported price ($75.58).

Key questions

• How does the size of this transaction compare with Ju Chi-Hong’s historical trading activity?
  This sale of 7,728 shares significantly exceeds the insider’s historical median sell-only trade size of 1,168 shares, and it is also well above the recent-period median of 1,859 shares, indicating a larger-than-usual execution.
• What proportion of Ju Chi-Hong’s equity stake was impacted, and what remains?
  The transaction left Ju Chi-Hong with 146,039 shares directly and 8,000 shares indirectly (via a foundation) post-sale.
• Is there evidence that trade size is influenced by remaining capacity?
  Holdings have declined by about 20% since June 2024, but the outsized transaction relative to historical medians suggests the sale was not solely dictated by reduced capacity, but also by an intent to liquidate a larger block at once.

Company overview

Company snapshot

• Ambarella develops advanced semiconductor system-on-chip solutions for high-definition and ultra-HD video compression, image processing, and artificial intelligence computer vision applications.
• The company generates revenue by selling integrated chip solutions to original design manufacturers (ODMs) and original equipment manufacturers (OEMs) through direct sales and distributors.
• It serves automotive, security, robotics, industrial, and consumer electronics markets, with products used in automotive cameras, security cameras, drones, and wearable devices.

Ambarella, Inc. is a technology company specializing in semiconductors for video and AI processing, with a focus on high-performance, low-power system-on-chip designs. The company leverages its expertise in image processing and deep neural network algorithms to address demanding applications in automotive, security, and consumer electronics. Its integrated solutions and broad customer base position Ambarella to compete in rapidly evolving markets driven by video analytics and artificial intelligence.

What this transaction means for investors

For investors, this looks less like a confidence break and more like personal liquidity management amid stock volatility. Though its shares have struggled this past year, Ambarella’s latest quarter showed clear operational progress, with revenue rising 31% year over year to $108.5 million as demand for edge AI silicon expanded across automotive and industrial customers. Management also lifted its full-year outlook, guiding for fiscal 2026 revenue growth of 36% to 38%, a notable acceleration from prior periods (and a fiscal record). Liquidity also remains solid, with nearly $300 million in cash and marketable securities, giving Ambarella flexibility to invest through a still-uneven semiconductor cycle.

Shares are down about 9% over the past year, sharply underperforming the S&P 500’s roughly 17% gain. Against that backdrop, Ju Chi-Hong’s 7,728-share sale stands out primarily for its size relative to his historical activity, not for its signal value. The transaction was materially larger than his prior median sale, but he continues to hold more than 146,000 shares directly, along with additional indirect exposure.

Glossary

Open-market sale: The sale of securities on a public exchange, not as part of a private transaction.
SEC Form 4: A required filing disclosing insider trades of a company's securities by officers, directors, or major shareholders.
Direct holdings: Shares owned and controlled directly by an individual, not through intermediaries or entities.
Indirect holdings: Shares owned through another entity, such as a trust or foundation, not held personally.
Foundation (in context): A legal entity, often nonprofit, through which an individual may hold or manage securities.
Transaction value: The total dollar amount received or paid in a securities transaction.
Median per-sale volume: The middle value of all historical sale sizes, used to compare transaction sizes.
Capacity drawdown: The reduction in the number of shares available for sale due to previous transactions.
System-on-chip (SoC): An integrated circuit that combines all components of a computer or electronic system onto a single chip.
Original design manufacturer (ODM): A company that designs and manufactures products for others to sell under their own brand.
Original equipment manufacturer (OEM): A company that produces parts or equipment marketed by another manufacturer.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.