Ambarella (AMBA) Stock: Morgan Stanley Sees Big Gains Coming

Ambarella Inc (NASDAQ: AMBA)

Ambarella has been a very interesting stock to watch as of late. At one point, the stock was on top of the world as one of the leading suppliers to GoPro. However, as GoPro fell, Ambarella’s relationship with the camera maker dragged the company downward. Nonetheless, things are starting to change in a big way for the company. In fact, its stock is soaring today, and for good reason. A key analyst note triggered bullish activity on the stock. Today, we’ll talk about the analyst note, how the market reacted to the news, and what we can expect to see moving forward. So, let’s get right to it…

AMBA Is Upgraded By Morgan Stanley

Morgan Stanley is one of the most trusted analyst firms in the world, and they had quite a bit to say about AMBA this morning. Earlier in the day, Morgan Stanley’s analyst, Joseph Moore released an analyst report, ultimately upgrading the stock and setting a strong price target. AMBA now has an “Overweight” rating, upgraded from “Equal-weight” and a price target of $55 per share. In his note, Moore explained that he expects for growth to persist in several segments, including wearables, consumer surveillance, auto, and drones. He also mentioned that sports and pro surveillance is likely to witness a strong rebound. In a statement, the analyst had the following to say about Ambarella…

We have consistently believed that Ambarella has maintained leadership in video processing for high-end cameras, but have remained on the sidelines until now as we thought that the multiple had climbed too high given customer concentration…”

He went on to explain that given recent numbers, industry growth, and Ambarella’s leadership in the industry, Morgan Stanley is now expecting to see exponential growth in AMBA.

How The Market Reacted To The News

As investors, we know that the news moves the market. Any time there is good news released with regard to a publicly traded company, we can expect to see gains in the value of the stock associated with the stock. Considering the fact that Morgan Stanley is one of the most trusted analysts in the industry, the news released today was overwhelmingly positive, and is leading to big gains for AMBA investors. Currently (11:32), the stock is trading at $43.28 per share after a gain of $2.57 per share or 6.31% thus far today.

What We Can Expect To See From AMBA Moving Forward

Moving forward, I have an overwhelmingly bullish expectation of what we can expect to see from AMBA. The truth is that throughout the recent declines, I’ve maintained a bullish opinion on the stock for one reason. AMBA is not GoPro. Sure, GoPro was a large customer, and still is, but the reality is that over the years, AMBA has made deals with some of the largest companies in security, gaming, computing, and more. Ultimately, it was GoPro that brought Ambarella up in the beginning. However, it’s important at this point not to hold the company accountable for GoPro’s short comings. The bottom line is that AMBA has an incredibly strong list of products that are being used in all kinds of ways around the world. They have an incredible management team, and most importantly a plan for future growth. All in all, I’m overwhelmingly impressed with the stock and expect to see incredible long term growth.

What Do You Think?

Where do you think AMBA is headed moving forward and why? Let us know your opinion in the comments below!