Citron Research released a new report on Ambarella Inc AMBA 1.63% that reiterated the firm’s extremely bearish outlook for the chip maker. In the report, Citron specifically calls out Jim Cramer’s bullish thesis for Ambarella as “ridiculousness,” and then explains how the stock’s current share price and the market’s high expectations for Ambarella are “detached from reality.”

The Bullish Argument

Cramer believes that Ambarella’s biggest growth avenue is not GoPro Inc GPRO 0.29% action cameras, but rather the rapidly-expanding drone market. “People are underestimating drones. Ambarella is the brains behind drones,” Cramer said on CNBC back in June.

In May, Dougherty & Co analyst Charles Anderson discussed the potential of the drone market. Chinese quadcopter drone maker DJI has projected sales of $1 billion in 2015. Anderson believes that the addressable drone market will swell to $1.9 billion in 2016 and sees a massive growth opportunity for GoPro and Ambarella.

Citron’s Take

Citron believes…

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