Ambiq Micro, Inc.: Stable Short-Term Outlook with Long-Term Growth Uncertainty Amid Strategic Shifts

Analyst Timothy Arcuri of UBS maintained a Hold rating on Ambiq Micro, Inc., retaining the price target of $40.00.

Timothy Arcuri’s rating is based on a combination of factors that reflect both the current performance and future prospects of Ambiq Micro, Inc. The company’s Q2 earnings were in line with expectations, with a slight revenue beat attributed to pull-ins. However, the guidance for Q3, while meeting expectations, indicated a slight quarter-over-quarter decline at the midpoint due to these pull-ins. This suggests a stable but not overly optimistic short-term outlook.
Additionally, the company’s strategic exit from low-margin business in China and the focus on higher ASP products is expected to stabilize gross margins around 43%, with potential for future expansion. Despite strong early demand in non-wearables, the lengthy development period for SPOT IP licensing in data center and automotive applications, projected to take 3-5 years, adds uncertainty to the long-term growth trajectory. These mixed signals contribute to the Hold rating, as the company’s immediate financial health is stable, but significant growth hinges on future developments.

In another report released on August 25, Bank of America Securities also initiated coverage with a Hold rating on the stock with a $42.00 price target.