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Shares of video processing chipmaker Ambarella  (AMBA) were down more than 5% premarket on Tuesday after analysts at Pacific Crest reduced the company's rating to "sector weight" from "overweight."

Analysts at the firm believe that any potential upside from the company's expansion into the autonomous driving industry is already baked into its current price. 

Additionally, analyst Brad Erickson believes that the company's largest customer, drone maker DJI, may have incorporated a rival's technology into its newest product, which could turn into a "material headwind" over time. 

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