NEW YORK (TheStreet) -- Shares of action camera maker GoPro (GPRO) - Get Report are flying higher this morning after Citi upgraded the stock to a Buy rating with $90 price target, citing the potential for the company from drones and Virtual Reality.

WHAT'S NEW: Citi analyst Jeremy David upgraded GoPro to Buy from Neutral and raised his price target on the stock to $90 from $63. The company will be a long-term beneficiary of "mega-trends" in flying cameras and virtual reality, David tells investors in a research note. The analyst views the consumer drone/quadcopter opportunity as attractive and estimates the flying camera market to be 10M units and $5B-$10B in sales in 2020. He believes GoPro could become a top-two player in this market. David raised his 2016 and 2017 estimates for the action camera maker.

WHAT'S NOTABLE: On the day after GoPro's second quarter report on July 21, Piper Jaffray analyst Erinn Murphy raised her price target on the stock to $72 from $68, telling investors that the company's content is gaining traction globally. Meanwhile, Barclays analyst Joseph Wolf raised his price target for GoPro shares to $71 from $65, telling investors that the quarterly earnings report supported his upgrade of the stock a week before. The company's margin expansion and international growth story should continue in the second half of 2015, Wolf said, reiterating an Overweight rating on GoPro.

AMBARELLA: Ambarella (AMBA) - Get Report should benefit from stronger than expected demand for drones, which are "literally flying off the shelves" at Best Buy (BBY) - Get Report, research firm Pacific Crest wrote in a note to investors on July 17. After conducting checks, Pacific Crest analyst Brad Erickson wrote that sales of drones have been stronger than expected. Ambarella should benefit from that trend, as well as from the fact that demand for GoPro cameras, which utilize Ambarella's chips, has been steady, Erickson stated. Erickson, who said the popularity of GoPro's cameras should enable Ambarella's results to beat Street expectations, kept a $123 price target on the shares. In contrast, short selling blog Citron Research issued a new report yesterday on Ambarella, contending the stock will trade back to $90 "on its way to much lower."

PRICE ACTION: In early trading, GoPro shares rose $2.86, or 4.6%, to $64.55, while Ambarella shares gained $1.90, or 1.6%, to $117.70.

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