One of our favorite tech investments is Ambarella Inc. (Nasdaq: AMBA) stock, which has climbed 46.4% in 2015.
We recommended this tech stock well before 2015. Money Morning's Defense and Tech Specialist Michael Robinson told readers about this profit play in August 2013. Since then, AMBA stock has soared 305%.
Fortunately, AMBA stock's run is not over. In fact, we just received another "Buy" signal for this innovative tech stock...
AMBA Stock's Latest Buy Signal
Ambarella is a video compression and processing-technology company. It is best known for developing the technology behind GoPro Inc.'s (Nasdaq: GPRO) wearable cameras.
AMBA is a small-cap stock with a market cap of just $2.3 billion. In the last four earnings reports, AMBA has beaten earnings estimates by an average of 29%. In the upcoming quarter, analysts are expecting earnings-per-share (EPS) growth of 132% and revenue growth of 62.5%.
Operating margin is healthy too, at 25.7%.
But the best number - and recent "Buy" signal - came from Canaccord Genuity. At the end of March the firm maintained its "Buy" rating on the stock and raised their AMBA stock price target to $81.
AMBA closed yesterday at $72.01. Reaching $81 would be a 12.5% gain from yesterday's closing price.
One thing boosting AMBA stock is its partnership with Google Inc. (Nasdaq: GOOG, GOOGL).
In November, it announced a partnership that centered on Google's "Helpouts" service app. "Helpouts" will let teachers, counselors, doctors, home repair specialists, personal trainers, and others to offer their paid or free expertise via real-time online video. Google is tapping Ambarella to provide the chips.
"For a small company like Ambarella, hooking up with a heavyweight like Google is incredibly bullish," Robinson said at the time.
But it's not just the partnerships with Google and GoPro that will push AMBA stock higher in 2015 ...
Two More Bullish Catalysts for AMBA Stock
Ambarella also supplies chips that are used in rear-view backup cameras that come in many cars. The "connected car" a major trend behind the current U.S. auto boom, and will continue to be a catalyst for AMBA stock.
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"Beginning in 2018, new federal rules mandate that all new cars sold in the United States must have backup cameras," Robinson said. "Over the past 15 years, the U.S. has averaged 15.5 million new vehicle sales a year - and that number is projected to rise 2.6% to reach 17 million new vehicle sales in 2015."
The company's chips are also used in ultra-high-definition televisions (UHDTV).
"Ambarella is one of the few chips firms out there with products optimized for the emerging field of UHDTV, which offers resolution four times that of traditional high-def sets," Robinson said. "The Consumer Electronics Association trade group estimates that Americans will be buying 1.43 million UHDTV sets, or roughly 5% of TVs sold nationally, 2016. That's a 60-fold increase from 2013, when UHDTVs debuted."
Robinson isn't the only one who's bullish on AMBA stock. At the end of 2014, analysts at Zacks rated AMBA a "Strong Buy." Investor's Business Daily rated Ambarella stock as the top pick in its group.
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.@Robinson_STI recommended $AMBA stock way back in August 2013. Since then it's up more than 300% - and it still has room to run...
— Kyle Anderson (@KyleAndersonMM) April 29, 2015