Ambiq Micro (NYSE: AMBQ) reported a stellar second quarter on Tuesday, with revenue surging nearly 90% year-over-year, but the edge-AI chipmaker is now grappling with supply constraints that could temper its ambitious growth trajectory.
The Austin-based company posted net sales of $33.9 million for the quarter ended June 30, a 89.7% jump from the $17.9 million reported in the same period last year. This figure exceeded the FactSet consensus estimate of $31.5 million by 7.6%. The adjusted loss came in at $0.07 per share, significantly narrower than the $0.26 loss analysts had anticipated.
Looking ahead, Ambiq guided third-quarter sales to a range of $36 million to $37 million, with a midpoint of $36.5 million that stands 7.4% above Wall Street's expectations. Management also reiterated its outlook for second-half sales to more than double from the prior year, but cautioned that chip supply remains tight.
“Given the rapid acceleration in AI demand, we and the broader semiconductor industry are facing supply constraints,” said CEO Fumihide Esaka in a statement. This admission shifts the investor debate from demand to capacity, as the company's ability to meet its aggressive guidance now hinges on securing adequate manufacturing capacity.
The company's financial performance also showed improved operational leverage. GAAP gross margin expanded to 45.0%, up 4.9 percentage points from 40.1% a year ago. The non-GAAP net loss narrowed to $1.8 million from $5.9 million, reflecting a $4.1 million improvement.
Ambiq's balance sheet has been bolstered by a recent stock offering, which raised approximately $168 million after fees. Cash and equivalents stood at $366.8 million as of June 30, a 161.5% increase from $140.3 million at the end of December. However, working capital demands have grown substantially: inventory increased 73.4% to $29.4 million, and accounts receivable more than doubled to $17.5 million, while operating cash use in the first half nearly doubled to $20.7 million.
These figures suggest the company is building inventory and receivables to support its growth, but it is not yet self-funding. The company's stock, which priced its IPO at $24 in July 2025, reached an intraday high of $91.61 on June 18 before retreating during the broader semiconductor selloff. In premarket trading Tuesday, shares rose 6% to $67.75.
Wall Street's price targets for Ambiq range from $44 to $125, reflecting divergent views on the company's execution. Recent recommendations include Roth Capital's Buy with a $125 target, UBS's Neutral at $70, Needham's Buy at $70, and Northland's Outperform at $44.
Ambiq's growth is being driven by strong demand for its edge-AI chips, which are used in battery-powered devices like wearables and IoT sensors. The company's first-quarter sales had already risen 59%, and the acceleration in Q2 suggests momentum is building. However, the company remains loss-making and depends on external foundries for production, leaving it vulnerable to industry-wide capacity constraints.
The coming quarters will be a key test for Ambiq. To hit the midpoint of its Q3 guidance, it needs just 7.7% sequential growth, but the second-half pledge requires sustained acceleration. As the company navigates these challenges, investors will be watching closely to see if supply can keep pace with the insatiable demand for AI-enabled chips.