It has been about a month since the last earnings report for Ambiq Micro, Inc. (AMBQ Quick QuoteAMBQ - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Ambiq Micro, Inc. due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Ambiq Micro, Inc. before we dive into how investors and analysts have reacted as of late.

Ambiq's Q2 Loss Narrows, Revenues Rise Y/Y

Ambiq Micro reported second-quarter 2026 non-GAAP loss of 7 cents per share, narrower than the Zacks Consensus Estimate of a loss of 26 cents. The company had incurred a loss of 43 cents per share in the year-ago quarter.

AMBQ generated net sales of $33.9 million, which increased 89.7% year over year and beat the Zacks Consensus Estimate by 7.62%. The strong performance reflected accelerating demand for edge AI solutions across customers, end markets and products.

Ambiq Benefits From Accelerating Edge AI Demand

Ambiq's second-quarter performance was driven by a sharp increase in demand for edge AI, with net sales marking the company's fifth consecutive quarter of sequential growth. Management said demand accelerated across customers, end markets and products, supported by healthy end-user demand, positive responses to recent customer launches and the continued ramp of a large new customer. Apollo2 and Apollo4 posted double-digit growth, while Apollo5 sales more than doubled year over year.

The company also indicated that demand remains stronger than expected. With lean channel inventories and continued expedite requests, management believes the growth reflects underlying end-market consumption rather than inventory replenishment. Orders continue to exceed initial forecasts, while customer demand is expected to strengthen further in the second half of 2026.

Ambiq's Margin Expansion Strengthens Profitability Profile

Ambiq's non-GAAP gross profit increased 109.3% year over year to $16 million, while non-GAAP gross margin expanded 450 basis points to 47.2%. The improvement was driven by a favorable product mix, greater Edge AI enablement and manufacturing efficiencies.

Management also highlighted progress in pricing and manufacturing costs. The company has continued to price products to capture the value provided to customers, while yield improvements and shorter testing times have helped reduce manufacturing costs as products move into higher-volume production.

Non-GAAP research and development expenses increased 55.5% year over year to $11.2 million, primarily due to intellectual property licensing, higher compensation and contractor costs. Non-GAAP SG&A expenses rose 23.7% to $8.2 million, largely reflecting higher sales compensation and public-company costs. Despite increased investments, non-GAAP net loss narrowed to $1.8 million from $5.9 million in the year-ago quarter.

Ambiq Expands Edge AI Portfolio and End-Market Reach

Ambiq is broadening its Edge AI opportunity through new hardware and software offerings. The company recently introduced the Apollo330 Plus and Apollo510 Light SoC families, both of which are seeing strong customer demand and backlog tied to next-generation product roadmaps. The products are expected to begin contributing revenues in the third quarter, with initial customer devices expected to reach the market early next year.

The company has also expanded its AI software portfolio with heliaCORE, compressionKIT and heliaPROFILER. These tools are designed to help customers accelerate production deployments, improve power efficiency, reduce memory requirements and lower system costs.

Ambiq is seeing increasing opportunities beyond wearables, including medical, industrial and smart home and building applications. Management expects revenues from these markets to more than double in 2026. The earnings presentation also highlights Apollo-based solutions and new software tools aimed at expanding Ambiq's presence across personal devices, industrial edge, smart home and buildings, and medical and healthcare markets.

Ambiq’s Balance Sheet

Ambiq ended the quarter with $366.8 million in cash and cash equivalents and no debt. The balance sheet was strengthened by approximately $168 million in net proceeds from its June follow-on offering, while the company said its two offerings in 2026 have raised approximately $243 million in net proceeds to support working capital, sales and marketing, and product development.

Ambiq Guides for Strong Q3 Growth

For the third quarter of 2026, Ambiq expects net sales between $36 million and $37 million, representing the sixth consecutive quarter of sequential growth. The company expects non-GAAP gross margin of 46.5-47.5%, non-GAAP operating expenses of $24-$25 million and a non-GAAP loss per share of 12-20 cents.

For full-year 2026, Ambiq expects approximately $135 million in net sales, with second-half revenues expected to more than double year over year despite supply constraints. The company now expects modest year-over-year improvement in full-year non-GAAP gross margin and operating expenses of approximately $85 million, including $7-$10 million of planned intellectual-property investments.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 21.81% due to these changes.

VGM Scores

At this time, Ambiq Micro, Inc. has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a score of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Ambiq Micro, Inc. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Ambiq Micro, Inc. belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, Qualcomm (QCOM Quick QuoteQCOM - Free Report) , has gained 8.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Qualcomm reported revenues of $9.95 billion in the last reported quarter, representing a year-over-year change of -4%. EPS of $2.21 for the same period compares with $2.77 a year ago.

Qualcomm is expected to post earnings of $2.18 per share for the current quarter, representing a year-over-year change of -27.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.4%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Qualcomm. Also, the stock has a VGM Score of D.