Ambarella Inc AMBA got price target boosts from several analysts recently who cited improved guidance from its prime customer GoPro Inc GPRO.
At least one analyst also believes Ambarella could be acquired by Qualcomm, Inc. QCOM.
The video chip maker is slated to post first-quarter results after the bell Tuesday and gets roughly a third of its revenue from GoPro.
Canaccord's Mathew D. Ramsay believes it's likely Ambarella will beat expectations, and boosted his target more than 6 percent to $86.
Ambarella closed Monday up about 4.8 percent at $94.52. Shares have gained nearly 65 percent during the past three months.
Related Link: Rising Expectations For Ambarella; What Experts & Crowd Think
Barrington's Ted Moreau Jr. made a similar move last Thursday citing the GoPro guidance. Moreau raised his target 29 percent to $97, maintaining an Outperform rating.
"Clearly the market is expecting a beat," said Moreau, who cited GoPro's outlook as well as prospects for increased business with GoPro competitor Xiaomi, and opportunities in the automotive and drone markets.
Pacific Crest's Brad Erickson raised his target 23 percent to $96, noting that his previous view didn't include GoPro's recently improved guidance.
But Erickson also raised the prospect that Qualcomm might make an offer for Ambarella.
Qualcomm last month issued $10 billion in notes, with most of the proceeds earmarked for buybacks.
"There's still plausible room for an Ambarella-sized deal," Erickson speculated.
Ambarella has a current market cap of about $2.83 billion and Qualcomm may face heightened competitive pressure from Avago Technologies Ltd. AVGO's recent agreement to acquire Broadcom Corporation BRCM for $37 billion.
Six weeks ago, Dougherty & Co.'s Charles Anderson suggested that Ambarella has strong prospects for supplying chips to makers of security cameras.
Anderson at the time maintained a Neutral rating on Ambarella, which is expected to post profit of $0.58 a share on revenue of $67 million Tuesday.
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