Figma was not the only IPO supply that rocket higher last week.
Ambiq wants to dominate with Rand AI, due to improvements of efficiency and battery life.
A strategy shift is Ambiq on a more profitable path.
10 shares that we like more than Ambiq Micro ›
Software company Figma Perhaps last week received the most attention from investors who monitor the first public offers (IPOs), but another technical name also almost doubled in its market debut.
Ambiq Micro(NYSE: Ambq) Priced in his IPO for $ 24 per share on Wednesday 30 July and shares were traded on Thursday in more than $ 50 before they closed a day later at around $ 40. The Semiconductor Chip Company could use what the next limit can be for the expansion of artificial intelligence (AI).
Image source: Getty images.
Much of the hype in the AI sector comes from spending to expand data centers and calculate electricity. Hyperscalers offer large -scale cloud infrastructure, platforms and software services to companies. Hyperscalers need enormous processing power for that cloud-based AI infrastructure. Ambiq is planning to integrate its ultra-low power technology into those high-performance calculation applications, as well as automotive chip products.
For now, however, Ambiq is tackling another need for the edge of AI applications with end users. Power efficiency is more critical of final markets such as personal devices, medical and health monitoring and smart-home products due to small device size and limited battery life.
Ambiq does this with its sub -threshold Power Optimized Technology (Spot) platform. The company says that spot results are included in a 2x to 5x reduction in power consumption compared to conventional integrated circuit designs, depending on the application. The platform gives customers more flexibility to perform AI models faster with faster conclusion. With considerably reduced power needs, the platform can also add more sensors, shrink the size of the battery or extend the battery life.
AI use on site is rapidly expanding, according to Ambiq. The customer base includes the China-based technology giant Huawei, leading GPS-Device Maker Garmin” AlphabetWearable Technology subsidiary Fitbit and Chinese smartphone maker Xiaomi.
In the midst of an uncertain geopolitical environment and tariff risks, the company works to reduce its dependence on Chinese customers. While turnover in the first quarter only grew by 3.4% years after year, the net turnover of end customers in the United States, Europe and Asia (outside the mainland of China) rose 94%. Ambiq also reaches higher gross margins outside of mainland China and says that it will continue to concentrate on growing his company outside of China.
With the shift of mainland China, the gross profit margin rose from 41% to 53.3% year after year in the first quarter. The company also generated a positive cash flow of $ 1.4 million activities in Q1. So it’s on the way to profitability.
Appreciation does not seem to be one of the most important risks related to Ambiq after the IPO. Market capitalization is only around $ 670 million after the third trade. Compare that with Figma with a market capitalization at $ 60 billion. Figma’s current turnout speed is much higher at around $ 1.5 billion, but the appreciation with 40 times turnover still makes Figma a very expensive shares to buy.
The price sales ratio of Ambiq is comparable to just over 10. Yet there are risks to be aware. Ambiq currently depends on a limited number of customers for the majority of his income. Huawei accounted for around 41% of the net turnover last year. Garmin and alphabet include approximately 24% and 21% of the net turnover in 2024 respectively.
However, the move away from China will certainly change that dynamic. In the first quarter of 2025, only 6% of the net sales would end customers on mainland China, a decrease of 50% during the first quarter of 2024.
Ambiq also has no long -term obligations of its end customers, so the operating results can change abruptly. But if Edge AI is the next limit that goes beyond the construction of Datacenter Compute Power, Ambiq is beautifully positioned. That helps to explain his successful debut in the markets last week and should justify more research from investors interested in an early investment in Edge AI.
Consider this: Before buying stock in Ambiq Micro:
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Howard Smith has positions in alphabet and Garmin and has the following options: Short September 2025 $ 260 calls on Garmin. The Motley Fool has positions and recommends alphabet and Garmin. The Motley Fool recommends Xiaomi. The Motley Fool has a disclosure policy.
Ambiq Micro Stock appears on IPO debut: what feeds the Golf? was originally published by the Motley Fool
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