Ambarella (NASDAQ:AMBA) stock was taking a beating on Tuesday following an update to the trade war with China.
This update has the U.S. Department of Commerce releasing a list of companies that have sanctions against them. What this means is that these companies will need approval from the U.S. before they can do business with Chinese companies.
So how exactly does this affect Ambarella? Unfortunately for AMBA stock, two of the semiconductor company’s major customers are Chinese companies that landed on the list. That will make working with them more difficult and will likely hurt AMBA earnings, reports The Motley Fool.
The bad Ambarella news doesn’t just stop with the release of the new sanctions list. AMBA stock is also down following updates from analysts. This includes Stifel Nicolaus cutting its price target for AMBA stock from $64 per share to $54 per share. Other concerns from analysts following the Ambarella news include KeyBanc reducing its earnings estimate for the company.
It’s worth pointing out that this Ambarella news has also caught the attention of some traders. This resulted in short sellers becoming active today and AMBA stock earning itself a spot on the the short-sale restricted list.
You can also follow this link to learn more about the 28 Chinese companies that have been added to the sanctions list.
AMBA stock was down 9% as of Tuesday afternoon, but is still up 58.81% since the start of the year.
As of this writing, William White did not hold a position in any of the aforementioned securities.