2 Reasons Ambarella's Turnaround Looks Shaky

Ambarella (NASDAQ: AMBA) investors have started losing hope of a turnaround as the chipmaker is finding it difficult to deliver growth amid stiff competition and a challenging end-market scenario. The video processing chip specialist's forward guidance was below Wall Street's expectations once again when it released its fiscal second-quarter results on Aug. 31.

This set the cat among the pigeons as it shows that Ambarella's business is on the wane. In fact, the midpoint of the company's third-quarter guidance indicates that its revenue could drop around 11% year over year. Not surprisingly, investors pressed the panic button -- sending the stock down 22% the next day -- as Ambarella's growth story now seems questionable.

Image source: Ambarella.

Source: Fool.com