Will This Tiny AI Stock Really Gain 24,600%?

Jeff Bezos is quietly building a new AI project that could potentially change the way machines interact with the physical world. And according to investor Ian King, one tiny public company could be positioned right in the middle of it. King even believes this market and stock could grow over 24,000%. However, King won't reveal the name of this stock unless you pay him hundreds of dollars. And that's where I come in. I sat down and watched this hour-long presentation and was able to figure out the stock based on the clues in the presentation. In this video, I'm going to reveal it completely free and tell you whether or not this stock is actually a buy. But before we do anything, let's look at King's recent track record to see if he's worth listening to. One of his biggest winners was AMD. That stock has absolutely exploded and is up more than 500% from the tracked recommendation. He also pitched Coherent that turned into another huge winner with the stock climbing well over 100%. Then there was Symbotic. That one worked out nicely, too, and is up around 50%. But King also had some major misses. He recommended Joby Aviation, and that stock has been crushed since the pitch, falling more than 60%. He also pitched Archer Aviation. That one has lost more than half its value. And finally, there was Kraken Robotics. That stock hasn't worked either and is down close to 30%. So overall, King's record has been very hit or miss. Some of his winners have been enormous, but several of his more speculative picks have fallen pretty hard. Now, let's quickly go through the presentation and figure out the stock Ian is pitching. Basic idea behind Ian King's presentation is that Jeff Bezos is building what could become the next major phase of AI. Instead of AI being trapped inside computers and phones, Ian King believes what he calls adaptive AI will allow machines to actually see, understand, and interact with the physical world. He points to Bezos's secretive project Prometheus, Amazon's massive AWS infrastructure, and Amazon's growing use of robotics is evidence that this shift is already beginning. And Ian King believes this physical AI market could grow from hundred billion to over 20 trillion. and instead of buying Amazon, he believes one much smaller public company could be one of the biggest beneficiaries and grow as much as 24,000%. Now, let's look at the specific clues that King left us so we can figure out the stock. The first clue is pretty broad. King says this is a publicly traded company on the NASDAQ and paired it with Amazon. It's tiny and roughly 800 times smaller. That still leaves us with hundreds of stocks, so we need to narrow it down even more. King says this company makes specialized semiconductor chips designed to help machines process what they're seeing in the real world. Think cameras, autonomous vehicles, robots, and other intelligent machines that need to analyze their surroundings in real time. Now we're down to about a few dozen possibilities, but King gives us another major clue. The chips aren't for giant power- hungry AI processors designed for massive data centers. The company specializes in extremely power efficient AI and computer vision processors designed to operate directly inside the device. That cuts down the field dramatically. At this point, we're looking for a relatively small semiconductor company focused specifically on Edge AI and machine vision. Then Kang gives away the location. He says the company is headquartered just 46 miles away from the San Francisco building he associates with Bezos's project Prometheus. And then finally, King gives us the clue we officially need to figure out the stock. According to King, Amazon itself selected this company as an official hardware partner for its AWS computer vision platform, meaning its AI processors were already designed to work directly with Amazon's cloud ecosystem. So, let's recap. Small NASDAQ semiconductor company, specializes in low power computer vision and edge AI, and it became an official hardware partner for Amazon Web Services. And there's only one stock that fits all these clues. I'm going to reveal the stock in 15 seconds. But before I do, I want to tell you about my free report on the top 10 stocks to buy and hold right now. These are companies I believe have the best mix of strong long-term potential and growth. When you're done watching, click the link in the description, enter your email, and I'll send it right to your inbox. The stock being pitched here is Amberella, ticker AMBA. If you appreciate me figuring out this stock for you, make sure to drop a like below. Also, now we have to figure out whether or not this stock is worth buying. And to do that, we're going to first look at what this company actually does. And then after, I'll give you my final rating. In simple terms, Amberella designed specialized AI chips that allow cameras and other machines to process information directly on the device. Instead of sending everything back to a massive data center, its chips can analyze what a camera or sensor is seeing in real time while using relatively little power. That's useful for things like security cameras, autonomous vehicles, drones, warehouse robots, and industrial equipment. Basically, anywhere a machine needs to understand its surroundings and make decisions quickly. But here's where we need a little reality check on King's presentation. The way King tells a story, you could come away thinking Amberlla is some newly discovered secret supplier sitting at the center of Jeff Bezos's Project Prometheus. But I can't find any official documentation connecting Amberella to Project Prometheus. The Amazon relationship he uses as one of the biggest clues is real, but it goes back years. AWS named Amberella as one of the initial chip partners for the AWS Panorama back in 2020, and Amberella also worked with Amazon's Sage Maker tools for Edge AI. The problem is AWS shut down this program earlier this year. So, I wouldn't describe Amberella today as some confirmed Jeff Bezos supplier. What is real, however, is that Amberella has become a legitimate ADJ semiconductor company. It says more than 50 million of its AI chips are already deployed and it's continuing to push deeper into robotics, automotives, and physical AI. It even launched a new dedicated EDAI accelerator called the X7 just this month. And financially, this business is still pretty small. Last quarter, Amberella generated about 108 million in revenue, up roughly 13% year-over-year. The company is still losing money under GAP, although that quarterly loss improved to about 6.7 million. The stock recently traded around $69 per share, giving Amberella a market value of roughly $3 billion. So, that's really the question heading into my verdict. Are we looking at a $3 billion company that's early to a potentially enormous physical AI market, or is the stock already pricing in a future that Amberlla still has a lot left to prove? All right, [snorts] it's final verdict time. Let's start with the number that King uses to sell this story more than 24,000%. Now, to be fair, King uses that number around potential growth of the broader physical AI opportunity. He isn't giving Amberlla a traditional $24,000 price target, but his presentation clearly wants you thinking about returns on that kind of scale. Plus, if the market were to grow 24,000%, it's reasonable to believe that this stock also would grow that amount. So, let's put that money into perspective. Amberella trades around $69 per share and is worth around three billion. A 24,000% gain in the stock would put shares somewhere around $16,000. Obviously, there'd be a stock split to make that smaller and turn Amberlla into a company worth more than 700 billion. That's the kind of valuation you get from some of the biggest tech companies in the world. And with Amberella currently generating a little over 400 million in annual revenue, getting anywhere close to that would require this company to become dramatically larger than it is today. At its current sales multiple, you're basically talking about eventually needing tens of billions, potentially around a hundred billion in annual revenue just to justify something remotely close to that valuation. So, I wouldn't buy Amberella because I'm expecting a 240x return. That's where I think the marketing gets in the way of the actual business. But once you strip that away, I actually think there's a pretty interesting company underneath it. The biggest thing Amberella has going for it is that it's not simply attaching the words of physical AI to an investor presentation. The AI processors are already out there in the world. The company says more than 50 million of its AI chips have been deployed across cameras vehicles drones robotics and other intelligent devices. And that installed base is important because the basic trend Amberella is betting on makes a lot of sense to me. In the future, more machines will be running AI locally. A security camera doesn't necessarily want to send every frame back to a giant data center. A robot needs to recognize an object and react immediately. An autonomous system can't always wait for the cloud to tell it what to do. That creates a legitimate need for AI processors that are powerful enough to run modern models, but efficient enough to operate inside these devices. And Amberella is positioned directly in that market. We're also starting to see some evidence that this isn't just theoretical. Revenue over the last 12 months is around 418 million, up roughly 20% year-over-year. The latest quarter grew about 13%. While the company is still losing under GAP, the quarterly loss has fallen substantially. Gross margins are also still close to 58%. More importantly, Amberella signed a long-term contract with Hanwa earlier this year that the company said could represent more than $800 million in potential revenue over its life. Hana also intends to use Amberlla's technology behind traditional security cameras, including robotics and industrial automation. And Amberella is still expanding its technology. Its new X7 chip is specifically designed to add physical AI capabilities to existing cameras, industrial controllers, and other machines while requiring customers to completely redesign their systems. Ambella says customers are already developing products around it. That's the part of the story I actually like. My hesitation is the price that you're paying for it. At roughly a $3 billion valuation against about $418 million in trailing revenue, Amberella trades around seven times sales. That's not absurd for a semiconductor company with a potentially large AI opportunity, but it's also not cheap. And we're still talking about a company that hasn't consistently translated this opportunity into gap profits yet. Then there's the Bezos angle. I wouldn't personally assign much value to that part of the thesis today. The AWS relationship King Highlights was real, but the Panorama platform behind the relationship has been discontinued, and I haven't seen evidence that Amarella is supplying Project Prometheus directly. If that changes, great. But I wouldn't pay for that possibility before it's actually confirmed. So, what would have to happen for this investment thesis to actually work? First, edge and physical AI need to become a major computing market instead of remaining a collection of smaller niches. Second, Amberella has to convert its technological position into much larger production volumes, especially in automotive, robotics, and industrial AI. Third, deals like Hanoa need to become the beginning of a pattern rather than one unusually large contract. And finally, revenue growth eventually need to turn into meaningful profitability. If those things happen, I can tolerate paying a premium today because this could look like a very different company 5 or 10 years from now. But at the current valuation, I don't think enough has been proven for me to call it a screaming buy. Instead, I think Amberella is more of a moderate buy. And before you go, don't forget to grab my free report on the top 10 stocks to buy and hold right now. These are companies I believe offer the best combination of long-term growth potential and strong underlying businesses. Just click the link in the description, enter your email, and I'll send the full report straight to your inbox.