Ambarella shares soar 17% on report chip designer is exploring sale

• Chip designer Ambarella has held talks with bankers and is considering a sale, according to a Bloomberg report.
• Sources told the news outlet that the company could draw interest from semiconductor firms looking to beef up their automotive business.
• The California-based company is known for its system-on-chip semiconductors and software used for edge artificial intelligence.

Ambarella shares popped 17% after a report that the chip designer is currently working with bankers on a potential sale.

Bloomberg reported the news, citing sources familiar with the matter.

While no deal is imminent, the sources told Bloomberg that the firm may draw interest from semiconductor companies looking to improve their automotive business. Private equity firms have already expressed interest, according to the report.

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The Santa Clara, California-based company is known for its system-on-chip semiconductors and software used for edge artificial intelligence. Ambarella chips are used in the automotive sector for electronic mirrors and self-driving assistance systems.

Shares have slumped about 18% year to date. The company's market capitalization last stood at nearly $2.6 billion.