Ambarella stock drops nearly 15% on weak outlook

The Santa Clara, Calif.-based company said it expects revenue between $60 million and $64 million in the second quarter, while analysts surveyed by FactSet had forecast revenue of $66.9 million.

Read also: Nvidia comes up $10 billion short of $1 trillion milestone

“The cyclical headwinds persist and continue to pressure our financial results, but we are taking our inference AI strategy to the next level with our R&D investment focused on the build-out of our CV3 platform as well as new derivatives of our third-generation AI technology,” said Fermi Wang, Ambarella chief executive, in a statement.

Read: Broadcom stock powers toward new record as analyst sees ‘accelerating’ Google AI orders

The company makes components like systems-on-chip for high-resolution video compression, image and radar processing, and neural network processing for edge AI applications, advanced driver assistance systems and robotics applications.

Ambarella reported a first-quarter loss of $35.9 million, or 91 cents a share, compared with a loss of $10.8 million, or 29 cents a share, in the year-ago period.

The adjusted loss, which excluded stock-based compensation expenses and other items, was 15 cents a share, versus net income of 44 cents a share in the year-ago period.

Revenue fell to $62.1 million from $90.3 million in the year-ago quarter. Analysts had forecast an adjusted loss of 20 cents a share on revenue of $62 million.

Ambarella shares finished Tuesday down 0.3% on the year, versus a 9.5% year-to-date gain by the S&P 500 index
SPX,
+0.00%
and a 24.4% rally by the tech-heavy Nasdaq Composite Index
COMP,
+0.32%.