Critical Review: Ambiq Micro (NYSE:AMBQ) and ESPEY MFG & ELECTRONICS (NYSE:ESP)

ESPEY MFG & ELECTRONICS (NYSE:ESP) and Ambiq Micro (NYSE:AMBQ) are both small-cap manufacturing companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitability.

Analyst Recommendations

This is a summary of recent recommendations for ESPEY MFG & ELECTRONICS and Ambiq Micro, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ESPEY MFG & ELECTRONICS	0	0	0	0	0.00
Ambiq Micro	1	3	2	0	2.17

Ambiq Micro has a consensus price target of $41.75, indicating a potential upside of 20.02%. Given Ambiq Micro’s stronger consensus rating and higher possible upside, analysts plainly believe Ambiq Micro is more favorable than ESPEY MFG & ELECTRONICS.

Valuation and Earnings

This table compares ESPEY MFG & ELECTRONICS and Ambiq Micro”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ESPEY MFG & ELECTRONICS	$42.60 million	3.70	$9.25 million	$3.15	17.05
Ambiq Micro	$76.07 million	8.37	-$39.66 million	($19.78)	-1.76

ESPEY MFG & ELECTRONICS has higher earnings, but lower revenue than Ambiq Micro. Ambiq Micro is trading at a lower price-to-earnings ratio than ESPEY MFG & ELECTRONICS, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ESPEY MFG & ELECTRONICS and Ambiq Micro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ESPEY MFG & ELECTRONICS	N/A	N/A	N/A
Ambiq Micro	N/A	N/A	N/A

Insider and Institutional Ownership

36.7% of ESPEY MFG & ELECTRONICS shares are owned by institutional investors. 5.5% of ESPEY MFG & ELECTRONICS shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

About ESPEY MFG & ELECTRONICS

Espey Mfg. & Electronics Corp., a power electronics design and original equipment manufacturing company, designs, manufactures, and tests electronic equipment primarily for use in military and industrial applications in the United States and internationally. The company’s principal products include power supplies, power converters, filters, power transformers, magnetic components, power distribution equipment, UPS systems, antennas, and high-power radar systems for use in AC and DC locomotives, shipboard power, shipboard radar, airborne power, ground-based radar, and ground mobile power applications. It also provides various services comprising design and development to specification, build to print, design services, design studies, environmental testing services, metal fabrication, painting services, and development of automatic testing equipment. In addition, the company produces individual components, such as inductors, printed circuit boards, wires, and tests items. It serves industrial manufacturers and defense companies, the government of the United States, foreign governments, and foreign electronic equipment companies through its direct sales organization and outside sales representatives. The company was incorporated in 1928 and is based in Saratoga Springs, New York.

About Ambiq Micro

Our mission is to enable intelligence (artificial intelligence (AI) and beyond) everywhere by delivering the lowest power semiconductor solutions. We are a pioneer and leading provider of ultra-low power semiconductor solutions designed to address the significant power consumption challenges of general purpose and AI compute – especially at the edge. Our customers rely on Ambiq to deliver AI compute closer to end users (edge environments) where power consumption challenges are the most severe. Our leading position is built upon our hardware and software innovations that deliver two to five times lower power consumption than traditional semiconductor designs. Our products power over 270 million devices today. We shipped more than 42 million units in 2024, and we estimate that over 40% of them ran AI algorithms. We seek to drive growth in AI adoption at the edge in the personal devices, medical/healthcare, industrial edge, and smart home and building markets and continue to set new standards in edge AI performance and power efficiency. Over time, we expect to integrate our ultra-low power technology into additional chip products that benefit from greater power efficiency, including high-performance compute applications such as AI data centers and automotive. AI is perhaps the most disruptive and revolutionary technology trend of recent history, estimated to represent $23 trillion of global annual spend by 2040, according to McKinsey. AI use cases continue to permeate our lives and improve our daily productivity by enabling us to interact with devices via voice and gestures, unlock our homes with facial recognition, track health accurately and intelligently, and hold clear calls amidst loud background noise. To date, a majority of AI compute has been deployed in data centers due to its large physical scale and the need for wall plug energy, as AI compute requires enormous and steady energy resources. At the edge, however, power limitations have been especially acute due to small device size and limited battery life. We believe this greatly constrains the potential of AI to improve our daily, on-the-go lives. Enabling AI at the edge – where the action takes place – with vastly improved power efficiency will allow faster real-time decision-making due to data proximity, greater data privacy, higher energy efficiency from reduced network usage, and less dependence on constant costly connections to the cloud. We believe new AI use cases will only be possible if edge devices are much more power efficient. Our proprietary Sub-threshold Power Optimized Technology (SPOT) platform is designed to fundamentally and cost-effectively reduce power consumption of battery- and wireline-powered devices alike. Depending on the application, devices incorporating SPOT demonstrate a two to five times reduction in power consumption compared to conventional integrated circuit designs. SPOT is a ground-breaking approach at the chip design level that incorporates sub- and near-threshold hardware without using expensive manufacturing processes. We provide a full-stack solution encompassing tightly integrated hardware and software. Our solutions include a diverse family of systems-on-chip (SoCs) and the software required to enable on-chip AI processing, general compute, sensing, security, storage, wireless connectivity, and advanced graphics. Our SoC solutions deliver compute at a very small fraction of the power consumed by our competitors’ products. Our ultra-low power SoCs serve a wide range of markets requiring on-device and real-time AI, including smartwatches and fitness trackers, augmented and virtual reality (AR/VR) glasses, smart rings, digital health monitors, security systems and access control, livestock tracking, crop monitoring, and factory automation. These devices increasingly offer on-chip AI-powered features such as speech recognition, domain-specific language models, image and video processing, and sensing, further straining power consumption, which our solutions are positioned to address. As global demand for our SoC solutions accelerates, our sales and marketing efforts are increasingly focused on our end customers in target geographies such as the United States, Europe, and Asia (ex-MainlandChina). We were incorporated in Delaware on January 20, 2010 under the name Cubiq Microchip, Inc., and in October 2012, changed our name to Ambiq Micro, Inc. Our principal executive offices are located in Austin, Texas.