Shares of GoPro Inc GPRO were trading higher by nearly 2 percent early Tuesday morning as investors interpreted a Morgan Stanley report on Ambarella Inc AMBA to be a bullish indication on the action camera maker.
Joseph Moore of Morgan Stanley upgraded shares of Ambarella to Overweight from Equal-weight with a $55 price target – implying a 30 percent upside.
Ambarella is a developer of semiconductor processing solutions and a major supplier to GoPro.
Moore's report focused on Ambarella's outlook and briefly discussed its major client, GoPro. Moore suggested that GoPro's weaker outlook may "have bottomed" and are "likely to become tailwinds" by the second half of 2016. However, the research report argued that Amabarella could see upside to its stock as the company gains market share in incremental "strategic" markets as it lowers its dependence on GoPro's business.
At time of writing, Ambarella was up 8.69 percent at $44.25. GoPro was up 0.70 percent at $11.58.
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