You may have already heard about “smart cameras” — devices that can automatically record high-definition video and instantly transmit the footage around the world.

But smart cameras are only as good as the chips inside them. One company has emerged as the market leader in the manufacture of these chips – Ambarella (NASDAQ: AMBA).

The top manufacturers of these cameras, including Samsung and Texas Instruments, have announced that they are ramping up production as demand for these devices increases exponentially.

Why is demand rising so quickly? You know about the recent controversies about the use of force by law enforcement. Police forces are scrambling to outfit their cops with wearable cameras so they can prove they went by the book, in case they get sued later. Plus, they’re moving to upgrade the dashboard cams they already have.

Police chiefs in almost all of America’s big cities – including New York, Los Angeles and Houston – have all said recently that they are placing big orders for smart cameras.

And officials are using high-tech cameras to prevent terrorism and other crimes as well. The artificial intelligence in the new cameras can detect abnormal or suspicious human behavior. “We’ve had 16 serious plots against the city since Sept. 11, and none has succeeded,” former New York Police Commissioner Ray Kelly said the other day.

Here are some other key markets:

Automobiles: Backup cameras will be mandatory on all new cars in the United States by 2018. Our stock pick already has deals with Ford and Toyota to provide the semiconductors that will be essential for these additions;

Sports: Imagine scoring the winning touchdown in a football game with friends and, thanks to a wearable camera, being able to instantly transmit video of the event anywhere you want. The leading sports camera maker, GoPro, has an exclusive deal with Ambarella; and

Security: The old-fashioned video surveillance cams that you’ve seen in convenience stores are being made obsolete by new digital technology – created by Ambarella – that provides a much clearer and more reliable image.

This little-known firm is the number one developer of low-power, high-definition video compression and image processing semiconductors.

Increasingly, companies need to back up their video feeds in “the cloud,” making video compression a top priority. Ambarella has a 65 percent market share for video compression technology. The devices are also very good for streaming video across networks.

The stock is trading at about 25 times forward earnings – a bargain for a company with this kind of growth potential. It’s been around since 2004 and is still being run by the same tech experts who founded it.

The stock price has dropped in recent weeks, due in part to concerns about the Chinese economy. But Ambarella’s Chinese exposure is actually rather minimal; its best growth prospects are in America and Europe. So the company is even more of a bargain than it was just 30 days ago.

To be a true leader in high-tech in the 21st century, a company must have global reach. Last month, Ambarella bought VisLab, the top European maker of video compression and image chips, for $30 million. That means Ambarella is poised to dominate this rapidly expanding market in both America and Europe.

Ambarella’s earnings conference call for the 2nd quarter is slated for early September. At that time, the world will learn what I just told you – this company is growing as fast as any firm in America. That’s why it’s essential that you act now and buy this stock before the end of August.

Tom Scarlett is an investment analyst at Personal Finance and Investing Daily.