At first, investors didn't seem too impressed with the recent quarter, despite Ambarella beating on revenue and earnings estimates, TheStreet's Jim Cramer, portfolio manager of the Action Alerts PLUS portfolio, said on CNBC's "Stop Trading" segment.
However, they have steadily begun to realize just how great a quarter it was for the chip supplier, and the stock has risen 21.5% over the past five days.
"I think drones are gigantic and commercial," Cramer said, adding that they can be used for weather, military use and even pipeline monitoring. "People are underestimating drones," he stated.
While shares of Ambarella are not cheap, the company has plenty of future growth, Cramer concluded.
At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.