Three Stocks Riding the Edge AI Wave
Deploying AI on devices such as smartphones is a big business. These three stocks could become key players in the growing market.
Key Takeaways
Edge AI, which processes data directly on devices instead of the cloud, is projected to become a $143bn market by 2034, driven by demand for real-time, low-latency applications.
Ambarella, Ambiq and Lattice Semiconductor are positioned to benefit from this trend, though each faces different challenges in profitability and valuation.
While Ambarella and Lattice are showing stronger growth momentum, Ambiq’s recent IPO has yet to convince investors, highlighting the mixed outlook across edge AI stocks.
Edge artificial intelligence (AI) is the deployment of AI models directly on smartphones, sensors and IoT devices — those on the edge of a network.
Unlike cloud AI, where data is sent over the cloud to remote servers for processing, edge AI processes data closer to the source, thereby reducing latency and bandwidth requirements. This is beneficial in use cases where real-time decision-making is critical — and can even be a matter of life or death — such as in autonomous vehicles, robotic surgery and predictive maintenance of machinery.
Edge AI is a booming business. According to Bloomberg Intelligence, the edge AI semiconductor market could grow to a value 3.37 times the size of the cloud-based AI semiconductor market by 2032.[1] One research firm has forecast that the global edge AI market will be worth $143.06bn by 2034, up from $25.65bn in 2025, as the graph below shows.[2]
Edge AI Stocks to Watch
Ambarella [AMBA]
Ambarella is a manufacturer of system-on-a-chip (SoC) solutions and edge AI software. Its processors are used in various applications, such as automotive video sensors, drones and surveillance cameras. The company has shipped 36 million edge AI processors to date.[3]
Ambiq [AMBQ]
Ambiq manufactures ultra-low-power SoCs for battery-powered edge AI devices, such as wearables and smart home appliances. As of July, its technology was embedded in more than 270 million devices.[4]
Lattice Semiconductor [LSCC]
Lattice is a semiconductor company that makes what is known as low-power field-programmable gate arrays, or FPGAs. More than 50 million of its edge AI devices have been shipped to original equipment manufacturers around the world.[5]
AMBA, AMBQ and LSCC Stock Ride the AI Wave
The Ambarella share price has gained a modest 14.01% since January 1 through September 19, though it is up 53.89% over the past 12 months. AMBA stock jumped around 17% on August 29 following its Q2 earnings.
The Ambiq share price is down 17.87% since the AI chipmaker went public on July 31. AMBA stock has been weighed down recently by disappointing Q2 results, which were reported on September 4.
The Lattice share price has gained 27.34% year-to-date and is up 38.5% over the past 12 months. LSCC stock has more than doubled from its 52-week low of $34.69, set on April 7 amid US President Donald Trump’s tariff turmoil, to its most recent close of $72.14, just below its 52-week high.
A Mixed Bag of Earnings
Ambarella’s Q2 2026 results were better than expected. Earnings were $0.15 per share on revenue of $95.5m versus analysts’ expectation of $0.05 per share on $90m.[6] This was a significant improvement on the loss of $0.13 per share on $63.7m reported in Q2 2025.[7]
“We are experiencing strong secular growth in the edge AI market, with an expanding breadth of applications driving unit demand," said CEO Fermi Wang in the Q2 earnings release.
Ambiq’s first quarterly results as a public company underwhelmed investors. Q2 2025 revenue declined 11% year-over-year from $20.3m to $17.9m, while its net loss narrowed from $10.6m to $8.5m.[8]
CEO Fumihide Esaka struck a bullish tone in the earnings release, emphasizing that the IPO will provide the company with the capital to execute on its strategic initiatives. These include “broadening our customer base as well as penetrating new end markets and geographies in support of driving long-term profitable growth.”
Lattice reported $124m in revenue for Q2 2025, flat year-over-year and up 3.2% from Q1.[9] However, its communications and computing segment grew 26% and 20% in the respective periods.[10]
“Looking ahead, we're excited about growth driven by major design wins alongside AI accelerators in cloud data center, wired communications, industrial robotics, ADAS [advanced driver assistance systems], and other far-edge AI applications,” said Lattice CEO Ford Tamer in the earnings release.
Here is how the fundamentals of the three stocks currently compare.
AMBA stock could be considered overvalued given its extremely high forward P/E ratio. While AMBQ stock has the lowest forward P/S ratio of the three, Ambiq is not expected to post a profit over the next 12 months. Both of LSCC stock’s ratios are fairly high, but Lattice is expected to report significant revenue growth over the next two years.
Edge AI: The Investment Case
The Bull Case for Edge AI
Demand for edge AI is expected to accelerate in the coming years as industries look for a competitive edge. This is illustrated by the fact that Ambarella expects full-year revenue for fiscal 2026 to grow in a range of 31–35%.
Beyond the reduced latency and bandwidth, edge AI can help to address AI’s energy problem. Data is processed locally, so there is no need for high-bandwidth data transmission and data center cooling.
The Bear Case for Edge AI
As demand for edge AI grows, new entrants are likely to emerge, while other players could get acquired by well-established semiconductor companies looking for a way to break into the edge AI market.
This could put the balance sheets of the likes of Ambarella and Ambiq under pressure. The former has not posted an annual profit since 2017,[11] while the latter is yet to achieve annual profitability.
Conclusion
Edge devices may not be the most exciting part of the AI story, but the benefits of edge AI means it is set to power the future. Ambarella, Ambiq and Lattice are three companies that should benefit from the long-term demand for AI at the edge.
This is for informational purposes only. OPTO Markets does not recommend any specific securities or investment strategies. Investing involves risk and investments may lose value, including the loss of principal. Past performance does not guarantee future results.
[1] https://assets.bbhub.io/professional/sites/41/Generative-AI-Outlook.pdf
[2] https://www.precedenceresearch.com/insightimg/edge-ai-market-size.webp
[3] https://ambarella.gcs-web.com/news-releases/news-release-details/ambarella-inc-announces-second-quarter-fiscal-year-2026
[4] https://ir.ambiq.com/news/news-details/2025/Ambiq-Announces-Pricing-of-Upsized-Initial-Public-Offering/default.aspx
[5] https://www.latticesemi.com/Products/Lattice-Intelligent-Edge-AI-and-FPGA-Solutions
[6] https://www.cnbc.com/2025/08/29/ambarella-stock-rises-on-ai-demand.html
[7] https://investor.ambarella.com/news-releases/news-release-details/ambarella-inc-announces-second-quarter-fiscal-year-2025
[8] https://ambiq.com/news/ambiq-micro-to-announce-second-quarter-2025-financial-results-on-september-4-2025/
[9] https://ir.latticesemi.com/news-releases/news-release-details/lattice-semiconductor-reports-second-quarter-2025-results
[10] https://ir.latticesemi.com/static-files/2ac2017b-bd15-4b6e-86a1-6b26527441ee
[11] https://www.bloomberg.com/news/articles/2025-06-24/chip-designer-ambarella-is-said-to-explore-potential-sale