What happened

Ambarella's (NASDAQ:AMBA) stock has has plummeted about 36% since the beginning of this year, according to data provided by S&P Global Market Intelligence. The company's share price slide started when one of its main semiconductor customers reported weak sales, and the drop continued later in the year after the company issued disappointing guidance for its fiscal second quarter.

So what

Ambarella's stock price took the biggest in January when GoPro, a key customer for Ambarella, said it had weak sales for some of its action cameras and announced that it would no longer sell its Karma drone. Chip sales to GoPro accounted for about 20% of Ambarella's top line at the time.

A red stock chart with the line moving down.

Image source: Getty Images.

Ambarella's share price remained relatively stable after that, but then dropped again after the company reported its first-quarter earnings. Earnings per share of $0.13 actually beat Wall Street's consensus of $0.09, but that wasn't enough to instill confidence in Ambarella's investors. That's because the company's management forecasted sales of $62 million at the midpoint for the upcoming second quarter, which was below the $68.2 million investors expected.

Investors also didn't like hearing that GoPro revenue, once a source of strength for Ambarella, would essentially be non-existent for the rest of fiscal 2019.

"In addition, we expect GoPro revenues to be immaterial to the total revenues for the remainder of the year as compared to approximately $37 million for the full fiscal year 2018," Ambarella's CFO George Laplante said on the earnings call.

Now what

Ambarella's shares are down about 3% in July, and with the company already reeling from its loss of GoPro revenue, investors shouldn't expect much of a bounce-back anytime soon. Unfortunately, Ambarella's stock price slide is the result of the company being too closely tied to GoPro's fate for far too long.