What: Shares of Ambarella (NASDAQ:AMBA) fell 14.4% in the month of October, according to S&P Capital IQ data, primarily driven by weak quarterly results from GoPro (NASDAQ:GPRO). Even so -- and despite a precipitous drop from its 52-week-high set in June, Ambarella stock still sits around 12% higher than it started this year:

AMBA Chart

AMBA data by YCharts

So what: Because Ambarella is GoPro's primary video-chip supplier and derived roughly a quarter of its revenue from the action-camera maker last year, it's not uncommon to see the two stocks move in lockstep. In fact, GoPro stock tumbled in early September, after Ambarella blamed an expected sequential decline in orders from the wearable-camera space for its own light fourth-quarter guidance.

But when GoPro stepped out and not only badly missed its own guidance for Q3, but also told investors to expect fourth-quarter revenue to decline 17% year over year -- compared with the 8.8% increase Wall Street projected -- it was equally unsurprising to see Ambarella get temporarily punished once again.

Now what: As I argued at the time, however, investors need to keep in mind that Ambarella is working hard to diversify its revenue sources and enjoyed significant design-win traction during the quarter in markets outside the wearable-cameras space, including IP security, automotive, and drones/flying cameras.

What's more, Ambarella stock has already largely recovered last month's losses, helped in part by analysts at FBN Securities who stepped out on a limb last week by initiating coverage on the stock with an "outperform" rating and a $70-per-share price target. That's a more than 23% premium over today's closing price, but also nearly 50% below Ambarella's 52-week-high set less than five months ago. Though I'm not holding my breath for shares to revisit those lofty levels in the very near future, I still think Ambarella stock represents a compelling option for patient investors to beat the market going forward.

Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Ambarella and GoPro. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.