Ambarella

Ambarella is one of a small handful of companies making the chips that put artificial intelligence directly inside cameras, cars, and robots. Revenue grew 37 percent over the past year to 391 million dollars, and automotive sales just hit an all-time record. About 80 percent of revenue now comes from edge AI products, so the growth story is real and not just a pitch.

Unlike a lot of money-losing tech companies, Ambarella sits on 278 million dollars in cash and has zero debt. That is a huge safety cushion that means it never has to scramble to raise money on bad terms. The company is even buying back its own stock, recently authorizing a new 50 million dollar repurchase program, which is something only a financially healthy business can do.

Ambarella is not yet profitable on a standard accounting basis. It lost about 76 million dollars over the past fiscal year, and a big reason it can claim any profit at all is by setting aside the cost of the stock it hands employees, which ran nearly 22 million dollars in a single quarter. The stock is also expensive relative to its sales, so a lot of future success is already baked into the price.

A single distribution partner, WT Microelectronics, accounts for roughly 70 percent of Ambarella's revenue. If that relationship ever wobbled, it would hit the business hard. On top of that, far bigger chip companies are circling the same artificial intelligence market, so Ambarella has to keep out-innovating much larger and wealthier rivals to hold its spot.