Home > Comparison > Technology > NXPI vs AMBA
The strategic rivalry between NXP Semiconductors N.V. and Ambarella, Inc. shapes the semiconductor industry’s technological evolution. NXP operates as a capital-intensive, diversified semiconductor giant with a broad product portfolio spanning automotive to IoT applications. Ambarella focuses on high-margin, specialized video processing chips targeting automotive and security markets. This analysis compares their distinct growth trajectories to identify which offers superior risk-adjusted returns for a diversified portfolio in today’s dynamic tech landscape.
Table of contents
Companies Overview
NXP Semiconductors and Ambarella stand as pivotal players in the semiconductor market, each with distinct market footprints.
NXP Semiconductors N.V.: Global Semiconductor Powerhouse
NXP Semiconductors dominates with a broad portfolio including microcontrollers, application processors, and wireless connectivity solutions. Its core revenue derives from supplying chips across automotive, industrial, and IoT sectors. In 2026, the company’s strategic focus centers on expanding its presence in automotive and communication infrastructure, leveraging its extensive global footprint and advanced sensor technologies.
Ambarella, Inc.: Specialist in Video Processing Chips
Ambarella specializes in semiconductor solutions for HD and ultra HD video compression and AI-driven computer vision. Its revenue engine is driven by system-on-a-chip designs used in automotive cameras, security systems, and consumer devices. The 2026 strategy emphasizes enhancing AI capabilities and power efficiency to capture growth in autonomous vehicles and smart surveillance markets.
Strategic Collision: Similarities & Divergences
While NXP pursues a broad, diversified ecosystem approach spanning multiple end markets, Ambarella concentrates on niche, high-value video and AI processing chips. Their primary battleground is the automotive semiconductor space, where both compete on innovation and integration. NXP’s scale and market breadth contrast with Ambarella’s focused specialization, defining distinct risk and growth profiles for investors.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | NXP Semiconductors N.V. (NXPI) | Ambarella, Inc. (AMBA) |
|---|---|---|
| Revenue | 12.3B | 285M |
| Cost of Revenue | 5.59B | 113M |
| Operating Expenses | 3.37B | 299M |
| Gross Profit | 6.68B | 172M |
| EBITDA | 3.89B | -101M |
| EBIT | 3.06B | -127M |
| Interest Expense | 384M | 0 |
| Net Income | 2.02B | -117M |
| EPS | 8.00 | -2.84 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison exposes the true efficiency and profitability trends driving each company’s financial engine in recent years.
NXP Semiconductors N.V. Analysis
NXP Semiconductors’ revenue shows moderate growth over 2021-2025, peaking at $13.3B before a slight decline to $12.3B in 2025. Net income rose by 8% overall, reaching $2B in 2025. Gross margin remains strong at 54.4%, while net margin holds a healthy 16.5%. Despite a 2.7% revenue dip in 2025, operating expenses decreased proportionally, preserving margin health.
Ambarella, Inc. Analysis
Ambarella’s revenue surged 25.8% in 2025 to $285M, reflecting strong top-line momentum over the period. However, net losses persist, with net margin at -41.1% and EBIT margin deeply negative at -44.4%. Gross margin stands at a favorable 60.5%, but operating inefficiencies and negative earnings continue to challenge profitability despite recent improvement.
Margin Strength vs. Revenue Momentum
NXP Semiconductors delivers consistent profitability with robust margins and positive net income growth, albeit with recent revenue softness. Ambarella impresses with rapid revenue growth and strong gross margins but struggles with sustained losses and weak bottom-line results. For investors prioritizing stable earnings, NXP’s resilient margin profile stands out as more attractive.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies compared here:
| Ratios | NXP Semiconductors N.V. (NXPI) | Ambarella, Inc. (AMBA) |
|---|---|---|
| ROE | 20.1% | -20.9% |
| ROIC | 11.0% | -21.9% |
| P/E | 27.1 | -27.1 |
| P/B | 5.45 | 5.64 |
| Current Ratio | 2.05 | 2.65 |
| Quick Ratio | 1.38 | 2.36 |
| D/E | 1.22 | 0.0094 |
| Debt-to-Assets | 46.0% | 0.76% |
| Interest Coverage | 8.62 | 0 |
| Asset Turnover | 0.46 | 0.41 |
| Fixed Asset Turnover | 4.12 | 19.96 |
| Payout ratio | 50.7% | 0% |
| Dividend yield | 1.87% | 0% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as the company’s DNA, exposing hidden risks and operational strengths that shape investor decisions.
NXP Semiconductors N.V.
NXP shows solid profitability with a 20.1% ROE and healthy 16.5% net margin, signaling operational excellence. Its valuation appears stretched with a P/E of 27.1 and P/B of 5.45. The company balances shareholder returns with a 1.87% dividend yield and solid reinvestment in R&D, supporting growth and innovation.
Ambarella, Inc.
Ambarella struggles with negative profitability metrics, including a -20.9% ROE and -41.1% net margin, reflecting operational challenges. Although its P/E is negative due to losses, its capital structure remains conservative with minimal debt. The company offers no dividends, focusing heavily on R&D to reverse its performance trend.
Profitability Strength vs. Recovery Challenge
NXP delivers a favorable mix of profitability and disciplined valuation, while Ambarella faces ongoing losses despite strong liquidity and debt control. Investors seeking stability may prefer NXP’s proven returns; those targeting turnaround potential must weigh Ambarella’s elevated risks carefully.
Which one offers the Superior Shareholder Reward?
NXP Semiconductors (NXPI) pays a consistent dividend yielding ~1.9% with a sustainable payout ratio near 50%, backed by strong free cash flow (~$9.6/share). It also engages in meaningful buybacks, enhancing total returns. Ambarella (AMBA) pays no dividends and shows negative net margins, relying solely on minimal buybacks amid weak cash flow (~$0.57/share). NXPI’s balanced distribution of dividends and buybacks suggests a more durable shareholder reward. I conclude NXPI offers a superior total return profile for 2026 investors due to its sustainable cash returns and capital allocation discipline.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of NXP Semiconductors N.V. and Ambarella, Inc., highlighting their core financial strengths and vulnerabilities:
NXP Semiconductors shows a balanced profile with strong ROE (4) and ROA (4), signaling efficient profit generation and asset use. However, its debt-to-equity score (1) flags high leverage risk. Ambarella relies on a low debt burden (score 4) but struggles with profitability (ROE 1, ROA 1) and valuation (P/E 1), reflecting operational challenges. NXP’s diversified strengths contrast with Ambarella’s reliance on financial conservatism.
Bankruptcy Risk: Solvency Showdown
NXP’s Altman Z-Score of 3.1 and Ambarella’s 10.1 place both firms well within the safe zone, indicating strong solvency for the current cycle:
Financial Health: Quality of Operations
NXP’s Piotroski F-Score of 5 suggests average financial health, while Ambarella’s score of 3 raises red flags about internal operational strength:
How are the two companies positioned?
This section dissects the operational DNA of NXPI and AMBA by comparing their revenue distribution and internal dynamics. The final goal is to confront their economic moats to identify which model delivers the most resilient and sustainable competitive advantage today.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how NXP Semiconductors and Ambarella diversify income streams and reveals their primary sector bets for strategic insight:
NXP Semiconductors anchors nearly all revenue in High Performance Mixed Signal, with $9B in 2018 dwarfing $385M from Corporate and Other. Standard Products have faded to zero, signaling a sharp focus on core technology. Ambarella lacks reported data, preventing direct comparison. NXP’s concentration suggests strong ecosystem lock-in but raises concentration risk if market conditions shift away from its dominant segment.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of NXP Semiconductors N.V. and Ambarella, Inc.:
NXP Semiconductors N.V. Strengths
- Strong profitability with 16.47% net margin
- Favorable ROE at 20.1%
- Solid global presence with diversified revenue from China, US, Europe, and Asia Pacific
- Favorable liquidity ratios with current ratio at 2.05
- Innovation indicated by high fixed asset turnover of 4.12
Ambarella, Inc. Strengths
- Favorable debt levels with debt-to-assets at 0.76%
- Strong liquidity with current ratio at 2.65 and quick ratio at 2.36
- High fixed asset turnover at 19.96 showing efficient asset use
- Favorable PE ratio despite negative earnings
- Presence in Asia Pacific and Taiwan markets
NXP Semiconductors N.V. Weaknesses
- Elevated debt-to-equity ratio at 1.22
- Unfavorable PE and PB ratios indicating valuation concerns
- Asset turnover low at 0.46 signals less efficient revenue generation
- Moderate debt level with 46% debt-to-assets
- No dividend yield, signaling limited shareholder returns
- ROIC below WACC at 11.03% vs 9.36% WACC, reducing capital efficiency
Ambarella, Inc. Weaknesses
- Negative profitability metrics with -41.12% net margin and -20.86% ROE
- Unfavorable ROIC at -21.96% below WACC at 12.97%
- Interest coverage ratio at zero indicates risk in debt servicing
- Unfavorable PB ratio at 5.64 and no dividend yield
- Limited geographic diversification focused heavily on Taiwan and Asia Pacific
- Lower asset turnover at 0.41 reducing operating efficiency
NXP demonstrates robust profitability and a diversified global footprint but faces valuation and leverage challenges. Ambarella shows strong liquidity and asset efficiency but struggles significantly with profitability and geographic concentration. These contrasts underscore different strategic focuses and risk profiles.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat remains the sole safeguard preserving long-term profits from relentless competition erosion. Let’s dissect the competitive moats of two semiconductor firms:
NXP Semiconductors N.V.: Diversified Product Portfolio and Market Reach
NXP leverages a broad product portfolio and global market presence as its moat. This manifests in stable gross margins (~54%) and consistent profitability despite recent revenue dips. Expansion in automotive and IoT sectors could deepen its moat in 2026.
Ambarella, Inc.: Specialized Video Processing and AI Integration
Ambarella’s moat centers on niche AI-enabled video processing chips, distinct from NXP’s broad offering. Despite strong recent revenue growth (+26%), it suffers from negative EBIT margins, reflecting under-leveraged scale. Future advances in autonomous vehicle cameras could unlock growth.
Moat Strength: Diversification vs. Specialization
NXP’s wider moat stems from diversified end markets and steady profitability, outperforming Ambarella’s narrow but promising specialization. NXP is better positioned to defend its market share amid semiconductor cyclicality and evolving tech demands.
Which stock offers better returns?
Over the past 12 months, NXP Semiconductors N.V. and Ambarella, Inc. exhibited contrasting price trajectories marked by distinct momentum shifts and volume trends.
Trend Comparison
NXP Semiconductors N.V. shows a bearish trend with a -7.11% decline over 12 months, accelerating downward despite a recent 15.32% rebound since November 2025. Its volatility remains high with a 24.1 standard deviation.
Ambarella, Inc. recorded a bullish 22.54% gain over the same period, though its upward momentum decelerated. Recently, it faced a sharp -30.08% drop amid lower volatility of 6.26.
Ambarella outperformed NXP over the full year, delivering stronger market returns despite recent weakness. NXP’s accelerated recovery signals potential trend shifts worth monitoring.
Target Prices
Analysts project solid upside potential for both NXP Semiconductors N.V. and Ambarella, Inc.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| NXP Semiconductors N.V. | 215 | 280 | 245 |
| Ambarella, Inc. | 80 | 115 | 97.5 |
The consensus target prices suggest a 11% upside for NXP from its current 220.66 USD price. Ambarella’s target implies a substantial 62% gain above the current 60.23 USD price, reflecting strong analyst confidence.
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How do institutions grade them?
This section compares the recent institutional grades for NXP Semiconductors N.V. and Ambarella, Inc.:
NXP Semiconductors N.V. Grades
The following table summarizes recent grades issued by major financial institutions for NXP Semiconductors N.V.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | Maintain | Buy | 2026-01-15 |
| Wells Fargo | Maintain | Overweight | 2026-01-15 |
| Truist Securities | Maintain | Buy | 2025-12-19 |
| JP Morgan | Maintain | Neutral | 2025-10-29 |
| Truist Securities | Maintain | Buy | 2025-10-29 |
| Susquehanna | Maintain | Neutral | 2025-07-23 |
| Truist Securities | Maintain | Buy | 2025-07-23 |
| JP Morgan | Maintain | Neutral | 2025-07-23 |
| Wells Fargo | Maintain | Overweight | 2025-07-23 |
| Barclays | Maintain | Overweight | 2025-07-22 |
Ambarella, Inc. Grades
The grades below reflect recent analyst opinions on Ambarella, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| B of A Securities | Maintain | Neutral | 2025-11-26 |
| Rosenblatt | Maintain | Buy | 2025-11-26 |
| Stifel | Maintain | Buy | 2025-11-26 |
| Needham | Maintain | Buy | 2025-11-26 |
| Rosenblatt | Maintain | Buy | 2025-11-24 |
| B of A Securities | Maintain | Neutral | 2025-08-29 |
| Northland Capital Markets | Maintain | Outperform | 2025-08-29 |
| Morgan Stanley | Maintain | Overweight | 2025-08-29 |
| Oppenheimer | Maintain | Perform | 2025-08-29 |
| Rosenblatt | Maintain | Buy | 2025-08-29 |
Which company has the best grades?
NXP Semiconductors N.V. consistently earns Buy and Overweight ratings from top-tier firms. Ambarella, Inc. holds mostly Buy and Neutral grades with some Outperform and Overweight ratings. NXP’s stronger consensus could signal greater institutional confidence, influencing investor sentiment.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
NXP Semiconductors N.V.
- Large market cap of $55.5B provides scale and R&D advantage in semiconductors.
- Competes across automotive, industrial, and IoT segments with diversified portfolio.
Ambarella, Inc.
- Small $2.6B market cap limits competitive leverage and scale economies.
- Focus on video processing chips narrows market exposure and increases niche risk.
2. Capital Structure & Debt
NXP Semiconductors N.V.
- Debt-to-equity ratio at 1.22 signals moderate leverage; interest coverage of 7.97 is comfortable.
- Debt-to-assets at 46% shows balanced capital structure but some refinancing risk.
Ambarella, Inc.
- Extremely low debt (D/E 0.01) reduces financial risk but interest coverage is zero, indicating no earnings buffer.
- Debt-to-assets at 0.76% implies strong balance sheet with minimal leverage risk.
3. Stock Volatility
NXP Semiconductors N.V.
- Beta of 1.46 indicates above-market volatility, typical for tech sector.
- Trading range $148–255 suggests moderate price fluctuation over recent periods.
Ambarella, Inc.
- Higher beta at 1.94 signals more pronounced stock price swings and investor risk.
- Wider range $39–97 reflects higher price volatility and speculative trading.
4. Regulatory & Legal
NXP Semiconductors N.V.
- Global footprint including China and EU exposes firm to geopolitical and regulatory complexity.
- Semiconductor export controls and trade tensions pose ongoing risks.
Ambarella, Inc.
- US-based with concentrated operations may face less regulatory complexity but higher domestic scrutiny.
- Limited international exposure reduces trade policy risk but increases single-market dependency.
5. Supply Chain & Operations
NXP Semiconductors N.V.
- Large, global supply chain vulnerable to semiconductor shortages and logistic disruptions.
- Broad product portfolio supports operational flexibility.
Ambarella, Inc.
- Smaller supply chain focused on niche components, potentially more agile but less diversified.
- Narrow product focus may amplify impact of single supplier or production disruption.
6. ESG & Climate Transition
NXP Semiconductors N.V.
- Larger firm with greater ESG initiatives and reporting; pressure to meet global sustainability standards.
- Exposure to automotive electrification trends offers growth and regulatory compliance challenges.
Ambarella, Inc.
- Smaller firm with less public ESG disclosure; may face rising investor demands for transparency.
- Limited scale may hinder ability to invest heavily in climate transition technologies.
7. Geopolitical Exposure
NXP Semiconductors N.V.
- Operations in multiple countries including China increase exposure to geopolitical tensions.
- Vulnerable to export restrictions and international supply chain disruptions.
Ambarella, Inc.
- Primarily US-based, geopolitical risk concentrated in domestic policy and trade environment.
- Less vulnerable internationally but reliant on US regulatory environment stability.
Which company shows a better risk-adjusted profile?
NXP’s most impactful risk lies in geopolitical exposure and complex global supply chains. Ambarella faces critical risks from weak profitability and operational concentration. Despite higher leverage, NXP’s diversified scale and positive financial metrics support a better risk-adjusted profile. Ambarella’s negative margins and volatile earnings threaten sustainability, underscoring caution.
Final Verdict: Which stock to choose?
NXP Semiconductors N.V. (NXPI) shines as a robust cash generator with solid profitability and an efficient capital structure. Its main point of vigilance is a slightly elevated debt load that could pressure financial flexibility. NXPI suits investors seeking stable income with moderate growth in a balanced portfolio.
Ambarella, Inc. (AMBA) boasts a strategic moat in advanced computer vision technologies, with a strong R&D focus fueling innovation. It carries a safer balance sheet with minimal debt but suffers from ongoing profitability challenges. AMBA fits well in a high-risk, high-reward portfolio aiming for turnaround potential.
If you prioritize resilient cash flow and consistent profitability, NXPI is the compelling choice due to its stronger income quality and financial stability. However, if you seek aggressive growth with a technology edge and can tolerate volatility, AMBA offers superior innovation potential despite its current losses. Both present distinct analytical scenarios depending on your risk tolerance and investment horizon.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of NXP Semiconductors N.V. and Ambarella, Inc. to enhance your investment decisions:
