Amprius Technologies, Inc.

Executive Summary

SELL, Low conviction. Rated SELL, Low conviction. The business is clearly improving, with FY26 revenue guided to at least $140M, gross margin at least 28%, and adjusted EBITDA more than $4M, but the stock still sits far ahead of present earnings power at 15.51x sales versus a 2.9x peer average. With shares already up sharply off the $6.36 low yet still below the 200-day, the setup looks more like a good company priced for a cleaner ramp than the fundamentals can yet support.

Investment Thesis

AMPX is no longer a science project. It is turning into a real battery supplier with visible demand, improving margins, and a balance sheet that can support the next phase. The evidence is concrete: Q2 2026 revenue of $34M, up 19% QoQ and 2.3x YoY, 27% gross margin, and a second consecutive raise to FY26 guidance for at least $140M revenue and at least 28% gross margin. The $24M European drone order is already shipping, and the Stark Future contract adds at least $100M through 2029. That is a much better business than the one investors saw in 2024, when gross margin was still -65% and management was mainly talking about future capacity.

The problem is price. At $12.23, the market cap is about $1.7B, which implies 15.51x FY2025 sales for a company that still lost money, posted -140.3% operating margin in FY2025, and has not yet proven steady quarterly profitability. Even if management delivers the full FY26 outlook, investors are still paying up today for a 2027 manufacturing and compliance milestone that has not happened yet. The bullish case requires several things to go right in sequence: the drone ramp must stay strong after the current order window, Stark Future must convert cleanly starting next year, and domestic NDAA-compliant production must arrive on time in 2027 without margin disruption.

What the market may be mispricing is not the existence of demand, which looks real, but the smoothness of the path from niche premium cells to scaled earnings. Working capital already shows some of that friction, with AR at $40.7M and inventory at $11.5M. The earnings track record also argues for caution. While AMPX beat estimates several quarters in a row, it has now posted two consecutive EPS misses in 2026, a reminder that scaling manufacturers rarely move in straight lines.

That leaves a simple conclusion. AMPX may become a much larger and more profitable company over the next few years, but the stock already reflects too much of that future relative to current economics. The setup is not broken enough for a high-conviction short, because revenue and margin momentum are clearly positive and short interest is high. It is still expensive enough for a SELL.

Key Metrics

Financial Strength

The balance sheet is the best part of the story. AMPX has no debt, a 7.17 current ratio, and $74.5M of cash, which gives it time to scale without immediate external financing. Margins are improving quickly, from deeply negative levels in 2024 to 27% gross margin in Q2 2026 and guided at least 28% for FY26, but cash conversion still needs proof because receivables and inventory are rising with the ramp. This is financially healthy for an early-stage manufacturer, not yet financially mature.

Competitive Position

AMPX's edge is product-level, not scale-level. The company sells very high energy-density silicon-anode cells into niches where weight and endurance matter enough that customers accept qualification work and premium pricing, which is why defense/UAV demand is accelerating and about half of Drone Dominance participants are using its cells. Durability is only moderate because battery advantages can erode unless AMPX converts performance into certified, NDAA-compliant domestic production in 2027 and proves it can manufacture at volume without giving back margin.

Management & Guidance

Current guidance is strong and specific: at least $140M revenue, at least 28% gross margin, more than $4M adjusted EBITDA, net loss of $10M or less, EPS loss of $0.08 or less, and capex less than $10M for FY26. Credibility has improved because this is the second consecutive guidance raise, and Q2 operating data support the trend, but the market should not treat guidance as risk-free given the company's recent two EPS misses, the still-negative EBITDA in Q2, and management's own warning that the margin path can be lumpy as mix and NDAA-compliant supply evolve.

Segment Analysis

• Battery cells and packs, total company (FY2025 revenue $0.1B): Revenue is concentrated in advanced lithium-ion products for UAV, defense, and light electric vehicle use cases, with growth now led by drone and defense demand.
• European drone order ($24M contracted program): Shipments began in Q2 2026 and are expected to run over about 2.5 quarters, supporting near-term revenue visibility.
• Stark Future contract (At least $100M through 2029): A multi-year light electric vehicle program with shipments starting early next year, important for 2027 to 2029 scale.
• Geography (Not disclosed): Geographic revenue split is not provided, but management highlighted Europe through the drone order and North America through NDAA-compliant supply-chain buildout.

Capital Allocation

Capital allocation has been conservative. There are no buybacks, no dividend, and no debt-funded expansion, while FY26 capex is guided to less than $10M and the company still held $74.5M cash after Q2. That discipline fits the stage of the business, but it also reflects limited free cash generation, with FCF at $0.0B and working capital absorbing cash as receivables and inventory build.

Management Execution & Track Record

Execution since the 2024 Q3 call has improved materially, but it has not been perfect. In late 2024, management pointed to $20M of LEV revenue recognition by mid-2025, Fremont capacity of up to 2 MWh entering 2025, 500 Wh/kg shipment readiness by end-2024, and a clearer path to profitability as SiCore scaled. Since then, actual results show real delivery on growth and margin direction: FY2025 revenue reached $0.1B, Q2 2026 revenue rose to $34M, gross margin improved to 27%, and FY26 guidance now calls for at least $140M revenue, at least 28% gross margin, and more than $4M adjusted EBITDA. That is strong progress from the -65% gross margin and roughly breakeven EBITDA on $7.9M revenue discussed in 2024 Q3. Still, credibility is not spotless, because the company has posted two EPS misses in a row in 2026, and the larger domestic manufacturing milestone remains ahead, with Fremont pilot-line production only expected in December 2026 and full NDAA-compliant domestic cells targeted for 2027.

Positioning & Flows

Ownership is somewhat concentrated, with the top 3 institutions holding 47.2%, led by BlackRock, Vanguard, and Driehaus, while insiders own just 4.0%. Short interest is elevated at 18.18% of shares, or 23.9M shares, though it fell 14.7% and days-to-cover is only 3, which limits squeeze pressure. Options positioning is flagged as positive in the near dated regime, so the tape can stay bid short term even if fundamentals do not justify the valuation.

Bull Case

• Growth is real, not theoretical: FY2025 revenue rose 161.7% YoY to $0.1B, and Q2 2026 extended sequential growth to six straight quarters.
• Margins are moving fast in the right direction: 27% Q2 gross margin versus 20% in Q1 and 9% a year ago, while FY2025 operating margin improved to -140.3% from -183.7%.
• Demand visibility has improved materially: the $24M European drone order is now shipping over roughly 2.5 quarters, and the 3-year Stark Future contract is expected to generate at least $100M through 2029.
• Balance-sheet risk is low for a company at this stage: $74.5M cash, no debt, debt/equity 0.05, and a 7.17 current ratio give management room to build capacity without immediate financing pressure.

Bear Case

• The stock is still priced for a much larger future business: 15.51x P/S and 13.49x P/B on a company that remains unprofitable, with FY2025 EPS of -$0.35 and net margin of -135.8%.
• Execution is improving, but not clean enough to support a premium this large: the last two reports both missed EPS, -25.0% on 2026-08-04 and -100.0% on 2026-05-06.
• Working capital is becoming a real friction point as shipments ramp, with AR at $40.7M and inventory at $11.5M, which can pressure cash conversion even if revenue keeps rising.
• The stock still carries crowded positioning risk, with 18.18% short interest and 23,928,102 shares short, showing that a large part of the market doubts the durability of the margin ramp.

Valuation & Price Target

Engine price target $7.83 (-36% vs current), Low confidence.

• P/S Multiple: $1.94 (17% weight)
• Quality-adjusted: $12.72 (20% weight)

This rating aligns with the quant baseline of SELL, though the conviction remains Low because the operating trend is improving fast. The key issue is that valuation still outruns the numbers: 15.51x sales versus a 2.9x peer average, despite FY2025 EPS of -$0.35, operating margin of -140.3%, and only emerging profitability in FY26. The quant engine's $7.83 target looks reasonable as a base case because the business quality has improved to a 55/100 score and balance-sheet risk is modest, but peer dispersion is wide and the quality-adjusted method points to $12.72, which explains why conviction cannot be high. There is no analyst coverage to cross-check, and that absence should not be treated as support for the current valuation.

Risk Assessment

Risk score 49/100 (Moderate). The biggest risk to the bearish call is that AMPX converts its current order book into sustained profitability faster than expected, because management is already guiding to more than $4M adjusted EBITDA and net loss of $10M or less for FY26.

The Bottom Line

AMPX rates SELL, Low conviction. The business is getting better fast, but the stock still asks investors to pay a premium multiple for profits that are only beginning to emerge. The right way to be wrong here is obvious: if FY26 guidance is beaten again, Fremont comes online on time in December 2026, and NDAA-compliant domestic production for 2027 looks locked in, the valuation can stay elevated longer than expected. A move to HOLD or BUY would require either a much lower entry price or firmer evidence that current revenue momentum converts into durable, scaled earnings.