GoPro relies on Ambarella technology to make its cameras work. Image source: GoPro.

What: Shares of video technology company Ambarella Inc (NASDAQ:AMBA) jumped 17% in February as investors took a bullish outlook ahead of earnings. Ironically, earnings disappointed and shares have fallen in early March to about the same level they started February.

So what: Ambarella customer GoPro has really been the thorn in Ambarella's back lately after it saw sales decline in the fourth quarter, something that heavily impacts Ambarella. But analysts saw bullish signs about GoPro's future as well as new products, with Stifel and Dougherty both upgrading Ambarella in the month of February.

Now what: The upgrades helped in February, but earnings came out on March 3 and they left investors disappointed. Revenue was $68 million last quarter and fiscal-first-quarter revenue is expected to fall to $55 million-$57 million. And net income dropped 71% to $5.1 million, so challenges for customers are certainly impacting results. It could be a rough year for the video technology company if customers don't see growth and I'd read more into earnings trends in March than the analyst-driven pop in February if I were looking at buying the stock. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.