Ambarella Investors Are Expecting A Great Quarter (Hint: It's Because Of GoPro)

After the closing bell this Tuesday, key GoPro Inc GPRO partner Ambarella Inc AMBA will report its fourth quarter earnings. 

At the start of 2013, the little-known Ambarella was trading at a modest $8 per share. Now, the stock is trading at over $60. 

In GoPro's S-1 filing leading up its IPO, the company cautioned that there was one component maker it relied upon and had no substitute for. That vital supplier is Ambarella.

Ambarella produces the high-tech video recording and processing chips which make the magic of GoPro possible.

When a company with a $5.2 billion market cap admits that it has no alternative to using your products, you're sitting pretty. Ambarella's position as an irreplaceable chip maker for GoPro has resulted in a tremendous amount of success over the past two years.

Last quarter, Ambarella came out with stellar earnings in anticipation of GoPro's holiday period upgrade cycle. Sure enough, when GoPro reported its fourth quarter results in early February, profits were off the charts.

After the closing bell,we'll get our first hint at how many cameras GoPro expects to sell beyond the December period. Wall Street expects Ambarella's earnings to come in around 48 cents per share and quarterly revenue to add up to $57 million. The crowd at Estimize is forecasting much stronger earnings, looking for 53 cents in EPS on top of $59 million in revenue. 

In the wake of GoPro's fourth quarter earnings report which crushed the Wall Street consensus, investors are expecting Ambarella to keep the momentum going.