Shares of Ambarella (AMBA) - Get Report rebounded Tuesday after the video-chip maker stated in a regulatory filing that a federal decision to blacklist a number of Chinese companies, including a major customer, wouldn't significantly impact its bottom line.
Ambarella's stock price rose 4.79% to $55.60 after the Santa Clara, Calif.-based company made the disclosure in a filing with the Securities and Exchange Commission.
The company also reaffirmed its earnings guidance for the current quarter, saying it wouldn't be impacted by the Trump administration's decision to place 28 Chinese organizations on an Entity List "for engaging in or enabling activities contrary to the foreign policy interests of the United States."
Companies on the Entity List now include one of Ambarella's major customers, Hangzhou Hikvision, which is a big player in the video surveillance market.
In placing the companies on the list, the Commerce Department cited human rights violations by the Chinese government against Muslim minorities in the far-western reaches of the country.
"The company expects that it will continue to be able to ship foreign-produced products to the listed entities, including SoCs responsible for a majority of the company's current revenue with those newly listed entities as well as the company's recently introduced computer vision SoCs," Ambarella told the SEC. Consequently ... the company does not expect the Entity List Rule to have a significant impact on the company's current financial results and confirms the guidance provided."