Ambarella heads into late September with a notable contradiction: short sellers have nearly doubled their positions over the past month, yet the borrow market suggests they face little friction doing so.
Short interest is the defining story this week. At 13.8% of free float, the position has grown 53% over the past 30 days — rising from roughly 3.8 million shares shorted in mid-August to nearly 5.9 million by September 22. That build is substantial for a fabless semiconductor with Ambarella's market profile. The pace slowed slightly this week, with SI dipping 3.4% over the five days to September 22, a modest retreat after the previous week's peak near 6.3 million shares. The ORTEX short score is running at 57.3, down from 60 on September 16, suggesting marginal easing — but the one-month ramp still dominates the picture.
Despite that bear-side conviction, the borrow market is not tightening in response. Availability has actually loosened this week, widening to 350% — meaning roughly three-and-a-half shares are available to borrow for every one currently borrowed. That compares to just 277% as recently as September 16, the tightest reading over the past month. Cost to borrow is effectively flat at 0.51%, only marginally above its 30-day level and a fraction of what a genuinely squeezed borrow looks like. With plenty of lending inventory available and cheap financing, new shorts face no meaningful friction entering positions. Options traders, by contrast, lean in the other direction: the put/call ratio has fallen to 0.61, below its 20-day average of 0.68, and close to the bullish end of the past year's range. That divergence — bears building in the stock loan market while options sentiment skews toward calls — is the clearest tension on this name right now.
The Street's recent moves skew negative, and the timing matters. Following Ambarella's early-September earnings report, several analysts cut targets sharply: BofA's Vivek Arya trimmed from $96 to $70 while keeping a Neutral rating, Roth Capital lowered to $65, and Stifel cut from $106 to $90 on a maintained Buy. Rosenblatt held its $120 target, the most bullish on the Street. The consensus mean sits at $89, implying roughly 33% upside from the current $67 level — though that gap reflects how far the stock has fallen rather than fresh conviction. The consensus is Hold, with 8 holds against 4 buys and 1 outperform. Most of the post-earnings analyst activity is now slightly beyond the 14-day window; the most recent move, Rosenblatt's reiteration of Buy at $120 on September 16, is the only action worth flagging as current. Bulls cite Ambarella's edge AI and physical AI IP as a multi-year growth driver; bears point to competition in the high-end video processor market, distributor concentration, and the pace of enterprise adoption. Valuation gives bears some ammunition too: the stock trades at 64.9x trailing earnings and 25x EV/EBITDA, the latter down sharply over the past month — EV/EBITDA has compressed by nearly 13 turns in 30 days — which may reflect earnings estimate cuts as much as any price recovery.
Institutional ownership is broadly stable, though T. Rowe Price stands out with a significant addition — roughly 1.9 million shares added through June 30, building its stake to 7.1% of shares. BlackRock added modestly through August, bringing its position to 8.9%. There are no activist 13D filers on the register; all major holders have filed under 13G passive designations. On the insider side, the picture is uniformly negative in terms of open-market transactions. On September 17, CEO Feng-Ming Wang sold 6,086 shares at $64.83, joining the CFO, COO, and a senior VP who all sold the same day. Notably, the CFO's September 17 sale of 3,126 shares was not disclosed as occurring under a 10b5-1 plan — a distinction worth noting, as the same CFO's September 18 sale of 1,896 shares was plan-covered. Director grants on September 8 were routine compensation awards and carry no sentiment signal. Net insider activity over the past 90 days reflects approximately -$3.9 million in open-market sales across the team.
The next earnings event is scheduled for November 24. The most recent print, on September 3, produced a sharp one-day drop of 6.3% followed by a partial five-day recovery of 1.1% — and it was that result which triggered the wave of analyst target cuts. With the stock now down 9% over the past month and short interest near its highest level of the year, the November print is where the divergence between the borrow market and options sentiment will likely resolve — either validating the bears' accelerating accumulation or handing call-heavy options traders their catalyst.
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