Why Ambiq Micro Stock Rocketed 45% Higher Today
Key Points
Ambiq's ultra-low power chips are in over 300 million edge computing devices.
Management sees strong sales and margin expansion in the years ahead.
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Shares of Ambiq Micro (NYSE: AMBQ) soared on Tuesday after the maker of extremely power-efficient chips reported a surge in sales.
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Bringing AI to the edge
Ambiq's revenue soared 59% year over year to $25 million in the first quarter.
The chipmaker's ultra-low power semiconductors are used in an array of edge computing devices, including those with diminutive designs. The company's low-voltage solutions are particularly useful in battery-powered gadgets. Think smartwatches, health-monitoring systems, smart glasses, and even connected jewelry the size of a ring.
With artificial intelligence (AI) being increasingly pushed from centralized clouds to decentralized local devices, Ambiq's edge technology is becoming even more valuable. Over 80% of the units it shipped during the quarter run AI algorithms.
"Our differentiated, ultra-low power SPOT [Subthreshold Power Optimized Technology] platform positions us as the partner of choice for enabling on-device intelligence as we expand our presence across a broader range of form factors, use cases, customers, and end markets," CEO Fumihide Esaka said.
Still, Ambiq is not yet profitable. However, its adjusted net loss improved by $171,000 to $5 million.
Progress toward profitability
Management projects net sales of $31 million to $32 million in the second quarter, with an adjusted net loss per share of $0.23 to $0.29.
During a conference call with analysts, chief financial officer Jeff Winzeler said Ambiq's growth investments could enable it to achieve sustained profitability beginning in 2028 -- and possibly even by the second half of 2027.
"With established technology leadership, positive demand trends, and a robust product roadmap, we remain confident in our ability to drive durable top-line growth and margin expansion in the years ahead," Esaka said.
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Joe Tenebruso 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.
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