What were the key drivers behind the revenue growth or decline in Q2 FY2026 compared to the previous quarter and year-over-year?

Fundamental drivers: Ambarella’s Q2 FY2026 revenue was shaped by a mix of segment‑specific dynamics. The company highlighted a quarter‑over‑quarter increase driven largely by the automotive‑ADAS and autonomous‑driving lane‑assist business, where new design wins with Tier‑1 suppliers pushed shipments of its H22 and H24 vision‑processing SoCs higher. Parallel growth in the enterprise‑security camera market—spurred by the rollout of 5G‑enabled edge AI analytics—added a solid tailwind to the video‑surveillance segment. Conversely, year‑over‑year revenue showed a modest contraction as the consumer‑drone and wearables categories fell short of prior‑year volumes, reflecting a broader slowdown in discretionary electronics spending and heightened competition from integrated solutions offered by larger foundries. The earnings release also noted a flattening of the automotive‑infotainment line after a strong prior‑year holiday surge, which softened the YoY picture.

Market & technical implications: The blend of QoQ upside and YoY softness left the stock in a tight trading range around its 200‑day moving average, with the price testing resistance near the $12.80–$13.20 band. Volume spikes on the earnings release suggest that investors are weighing the upside from automotive and security wins against the lingering demand weakness in consumer segments. Traders might consider a bull‑ish bias on a breakout above $13.20, targeting the next resistance around $14.00, while keeping a stop‑loss near $12.60 to guard against a potential pullback if the YoY decline deepens or if macro‑risk sentiment deteriorates. On the downside, a breach of the 50‑day moving average (~$12.30) could open a short‑or‑hedge opportunity, especially if subsequent guidance signals slower automotive adoption or continued softness in consumer‑grade applications.