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Ambarella (AMBA), Dongfeng Fengshen Tie Up to Build DMS

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Ambarella (AMBA - Free Report) recently inked a strategic partnership with Dongfeng Fengshen (Aeolus), which is a Chinese automobile brand owned by one of China’s largest automobile groups, Dongfeng Motor Corporation, to build Driver Monitoring System (“DMS”) for the newly launched Yixuan Max vehicle.

Per the deal, Ambarella’s CV25 AI vision System-on-Chip (“SoC”) and development platform will be utilized to build the DMS, which will monitor fatigue, distraction, smoking, telephoning and other behaviors affecting driving safety and will give the driver a reminder. The Chinese automaker rolled out DMS for the first time as a mass-production application through the Yixuan Max vehicle launch.

Launched in January 2019, Ambarella’s CV25 SOC combines advanced image processing, high-resolution video encoding and CVflow computer vision processing in a single, extremely low power design. This intelligent camera provides DMS, and home monitoring and professional surveillances.

Ambarella continues to expand its CVflow family of AI processors through consecutive global collaborations. In August, this year, it announced that Moscow-based Yandex’s (YNDX - Free Report) new SignalQ2 LTE-enabled DMS camera is based on the company’s CV25 edge AI vision SoC. In the same month, KeepTruckin, a fleet management company, selected CVflow’s CV22 edge AI vision SoC for its new AI Dashcam.

Prior to that, in June, electronic vehicle pioneer, Arrival, selected Ambarella’s CV2FS CVflow AI vision processor for environmental perception module, which was available for all types of Arrival vehicles. Ambarella expanded its AI vision SoC portfolio further with the back-to-back launch of CV5S and CV52S SoCs in the same month.

As noted during its latest earnings call, Ambarella witnessed 60 CV SoC family customers achieve production status during the first half of fiscal 2022. It stated that momentum in CV flow SoCs in professional IP cameras across all geographies sustained through the quarter reported.

With all automakers developing self-driving cars, there has been high demand for camera-based SoCs and computer vision technology in recent times. Ambarella, being an AI silicon company, has deep technical knowledge in camera-based SoCs and enhanced computer vision capabilities. Growing demand for Automated Driver Assistant Systems (“ADAS”) is a key catalyst for the company’s near-term growth. Design wins for automated parking systems are positive. Ambarella expects demand for security cameras with computer vision capability to continue growing, giving the company an opportunity to increase its value contribution per camera and in turn, bolster the top line.

Zacks Rank & Key Picks

Currently, Ambarella carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Avnet (AVT - Free Report) and Apple (AAPL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate of Avnet and Apple are pegged at 25.4% and 12.5%, respectively.


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