Ambarella (NASDAQ: AMBA) shares were trading 26% higher intra-day on Wednesday following better-than-expected Q2 results, which were driven by strong demand and improving supply yield. The company’s quarterly $0.35 EPS came above the consensus estimate of $0.25. Q2 revenue of $79.3 million also beat the consensus of $75.68, growing 58% year-over-year.

The company’s management guided Q3 revenue in the range of $88.0 - $92.0 million, again higher than the Street estimate of $78.7 million.

Analysts at Deutsche Bank increased their price target on the company’s shares to $115 from $110 following strong beat/raise, impressed by the company’s guidance which implies strong growth to continue in Q3 as increased foundry supply (post TX freeze) allows the company to better meet demand. Beyond the near-term, the brokerage believes the company’s Automotive growth trajectory remains very strong with revenue in that segment expected to roughly double year-over-year in 2022 and continue growing strongly in the future.