Ambiq Micro IPO: Shares of AI chip developer become available

Shares of Ambiq Micro, a developer of energy-efficient chips for edge AI (artificial intelligence) applications, have become available on the Freedom customer trading system. The securities are listed under the ticker AMBQ.US. They will appear on the New York Stock Exchange in a few hours. 

Ambiq Micro raised $96 million in its IPO, selling 4 million shares at $24 apiece. The company had originally planned to offer 3.4 million shares at prices ranging from $22 to $25. Based on the offering price, Ambiq's market capitalization is $423.3 million.

The listing was organized by BofA Securities and UBS Investment Bank;

Ambiq plans to utilize the IPO proceeds for general corporate purposes, including working capital, marketing and new product development, it said in a prospectus filed with the regulator.

Ambiq Micro offers semiconductors designed to solve power consumption problems in general purpose computing and AI, especially in so-called edge AI. This is a model that works not in the cloud, but directly on the device, i.e. "at the edge" of the network. In this way, data collected by devices - cameras, sensors or smartphones - is processed directly where it is collected.

Ambiq's key products - the Apollo line and the promising Atomiq series under development - are built on its proprietary SPOT (Sub-threshold Power Optimized Technology) platform. It provides minimal power consumption with high performance and is customized for AI applications.

Ambiq is banking on energy efficiency: the company's chips consume 2-5 times less power than their traditional counterparts and have already been integrated into more than 270 million devices, writes Investing.com. It has shipped 42 million chips in 2024, more than 40% of which have been used to run AI algorithms in wearable gadgets, medical devices, smart home systems and industrial automation. 

According to preliminary data, Ambiq's gross margin for the first half of FY2025 grew 46.3% - up from 35.7% a year earlier. Gross profit is estimated to be in the range of $15.2 million to $15.9 million, reflecting improved operating efficiency from sales of software and System-on-a-Chip (SoC) minicomputers, reported Reuters. 

Despite strong growth, Ambiq warned in a prospectus of serious risks, including dependence on Taiwan Semiconductor Manufacturing Company, the largest chip maker, and a lack of long-term contracts with customers. The company also identified weaknesses in its internal financial controls, which becomes especially important as it transitions to public reporting standards.

The future vector of its development is the expansion of the SPOT architecture beyond microcontrollers towards specialized AI processors and application solutions. Ambiq estimates that the technology can occupy a key niche in the edge AI market, which could exceed $22.5 billion by 2028.

It is companies related to artificial intelligence that will be the main drivers of a new round of technology placements. The rapid development of generative AI is encouraging businesses to invest in relevant solutions, notes Investing.com..

"While Nvidia is the AI leader in data centers, the market remains open in edge AI. Ambiq Micro has every chance to take a significant position in it," emphasizes Constellation Research analyst Holger Müller;

"Ambiq is aiming for the AI niche 'on the edge' by offering chips with power consumption 2-5 times lower than its peers. This gives the company an edge in the fast-growing wearable electronics market," announced Lukas Mühlbauer of IPOX .

Despite gross profit growth, the company faces slowing revenue, persistent operating losses and negative free cash flow of $18 million for the 12 months to March 31, 2025, warns IPO Edge investment manager Donovan Jones. He recalls that Ambiq operates in a highly competitive market, with a high dependence on a single supplier - TSMC and three customers that account for 76% of revenue. 

Freedom Broker analyst Alem Bektemirov agrees that the limited number of large clients and lack of long-term contracts pose a threat of reduced sales volumes.

Based on the industry multiple and annual revenue of $76.6m, Ambiq's fair capitalization, according to Bektemirov's calculations, should be $398.3m or $23.38 per share. At the IPO price of $24 - such a target implies a drop in quotations by about 2.6%, which may indicate a revaluation of the company at the time of the offering, the analyst adds.

_______________________

Freedom Broker clients will be able to trade Ambiq Micro shares before the opening of the main exchange session. Trading will begin in the early pre-market format 2-3 hours before the opening of the US exchanges (from 15:30-16:30 Astana time). To participate, click on the ticker AMBQ.US.

This article was AI-translated and verified by a human editor