The Short Answer
Ambarella's business activity is qualitatively halal, but its current quantitative asset-based screen fails. The April 30, 2026 filing shows liquidity/assets of 38.08%, above the examined 33.333% limits.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-04-30; calculated 2026-07-15.
0 / 794.838
302.678 / 794.838
153.618 / 794.838
2.083 / 100.357
- Financial
- Fails
- Overall
- Fails
Debt/assets is 0.00%, liquidity/assets is 38.08% and receivables-plus-cash/assets is 19.33%; liquidity exceeds the examined FTSE limit and the income upper bound is 2.08%.
- Financial
- Fails
- Overall
- Fails
Liquidity/assets is 38.08%, above the examined MSCI total-assets limit; this is not an index-membership claim.
- Financial
- Fails
- Overall
- Fails
Liquidity/assets is 38.08%, above the examined Malaysia limit; this is not an official classification.
- Financial
- Not calculated
- Overall
- Fails
A licensed historical market-cap series is not stored; the asset-based liquidity screen already fails.
Business-activity disclosure
Ambarella designs edge-AI and computer-vision system-on-chip processors for automotive, security, IoT and other vision applications. The semiconductor activity is generally permissible, while surveillance, customer and end-use revenue is not reduced to a universal prohibited-revenue numerator.
Limitation: The filing does not classify every camera, automotive or IoT end use by a universal Sharia category; activity remains qualitative.
Purification
Other income, net is used as a conservative upper bound of $2.083 million; ZakatInvest does not prescribe a scholar-approved purification percentage.
Inputs, assumptions and primary sources
- Amounts are USD millions from Ambarella's April 30, 2026 Form 10-Q.
- No interest-bearing debt is reported; operating lease liabilities are excluded.
- Cash is $114.443 million and marketable debt securities are $188.235 million across current and non-current balances.
- Net accounts receivable is $39.175 million and first-quarter revenue is $100.357 million.
- Other income, net is $2.083 million and is used as a conservative upper bound because the filing does not reduce every component to a standalone interest numerator.
- Edge-AI and computer-vision semiconductors are generally permissible, but surveillance and customer end uses remain qualitative.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
Designing and selling AI and image-processing semiconductors is generally permissible at the activity level. Ambarella has no interest-bearing debt, but cash and marketable debt securities are 38.08% of assets; other income, net is a conservative upper bound of 2.08% of revenue and no universal prohibited-revenue numerator is disclosed.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
Ambarella's Business Activity
Ambarella designs low-power edge-AI and computer-vision system-on-chip (SoC) processors used in:
- Automotive: Driver-assistance and autonomy vision systems
- Security and IoT cameras: Smart cameras with on-device AI
- Robotics and devices: Other vision-enabled edge applications
Designing and selling these semiconductors is permissible at the activity level — they bring efficient AI and image processing to edge devices.
Concerns to Be Aware Of
1. Interest Income on Cash
Cash and marketable debt securities total $302.678 million, or 38.08% of assets, above the examined liquidity limits. Other income, net of $2.083 million is a conservative upper bound; ZakatInvest does not prescribe a fixed purification percentage.
2. Debt Ratio
Ambarella reports no interest-bearing debt, so debt/assets is 0.00%. That pass does not offset the liquidity failure, and a market-cap denominator is not calculated here.
3. Cyclicality and Surveillance Use
As a semiconductor company, Ambarella's revenue and margins are cyclical and sensitive to end-market demand, and its computer-vision chips can be used in surveillance applications that raise privacy considerations. These are business and ethical considerations rather than Sharia screen concerns.
Filing-Based Ratios (April 30, 2026)
These calculations use Ambarella's first-quarter fiscal 2027 Form 10-Q and total-assets denominators:
- Debt / assets: 0.00% — passes the examined debt limit
- Cash + securities / assets: 38.08% — fails the examined liquidity limits
- Receivables + cash / assets: 19.33% — passes the examined limit
- Other income upper bound / revenue: 2.08%; no fixed purification percentage asserted
Methodology Interpretation
On the stored total-assets calculations, FTSE Yasaar, MSCI Islamic and Malaysia SAC financial screens fail on liquidity. These are comparisons with published methodologies, not claims of index membership or an external agency verdict.
Bottom Line
Ambarella (AMBA) has a generally permissible edge-AI semiconductor business, but the current filing-based quantitative screen fails because liquidity/assets is 38.08%. This is not a universal halal certification; investors should consult a qualified scholar and review updated filings. Surveillance applications remain a separate qualitative concern.
For Muslim investors seeking semiconductor exposure, AMBA sits alongside other halal-screened names like NVIDIA (NVDA) and AMD (AMD).
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