Investors use Ambarella as a tell for GoPro, given its role as a key chip supplier for the action camera maker, and Friday they clearly didn't like what they saw.
"During the quarter, we saw strong sales from our existing markets, including professional IP security cameras and automotive aftermarket dash cameras, as well as from new markets, including flying cameras and home monitoring cameras," Ambarella CEO Feng-Ming Wang said on a Thursday earnings call with analysts. (The company's fiscal third-quarter .)
"[But] this growth has partially [been] offset by the expected headwinds in our wearable sports camera market, due to high inventory levels at the customers."
However, bulls are willing to look past that disappointment in exchange for exposure to Ambarella's other sought-after markets such as drones.
For GoPro, it's a different story. Ambarella's report only fueled concerns about how the company will navigate the all-important holiday season.
The company's stock has lost some 70 percent so far this year, or more than $5 billion in market cap.
Friday, the team at Robert W. Baird cut its rating on GoPro from "outperform" to "neutral." The analysts specifically note that their checks have not suggested a meaningful pickup in GoPro camera sales. Their price target is $18.
In an attempt to encourage demand, GoPro announced Friday that it cut the price of its Hero4Session camera by $100 to $199. (This is the second price cut: in late September, GoPro also slashed the price by $100).
Given these serious headwinds, what's the bullish case for GoPro?
Alex Gauna of JMP Securities remains a buyer. He said the story for the company hasn't changed: It's still the dominant player in a fast-growing market. Research firm NPD reports that GoPro commands 94 percent of the action camera market in the U.S. That's a $630 million market that's growing at a rate of 40 percent per year.
Gauna tells CNBC that he's also encouraged by a range of potential catalysts in 2016 including a new camera, GoPro drone and improved software.
Here's another reason for optimism, he says: GoPro is an attractive acquisition target given its powerful brand name. The list of would-be suitors includes, according to Gauna, a who's who of tech titans.
"Tech giants are competing for user attention whether it's Google and YouTube; Amazon and Prime Video; Apple and its TV; or Microsoft and Xbox," he said, adding that GoPro could be a smart strategic fit for any of those companies.