Credo Technology praised by Wall Street amid booming growth
Dec. 02, 2025 8:07 AM ET
By: Chris Ciaccia, SA News Editor
Credo Technology ( CRDO) was in focus on Tuesday as Wall Street analysts praised the high-speed solutions company after it reported much better-than-expected results and guidance. The company is benefiting from a much larger boom in the active electrical cables market than previously believed.
Shares soared 16.3% in premarket trading on Tuesday, while other AI-linked stocks, such as Celestica ( CLS) and Astera Labs ( ALAB), also moved higher.
Needham analyst N. Quinn Bolton reiterated his Buy rating and upped his price target to $220 from $190, noting that there was strength across the company's customer base.
“Our key takeaways include: 1) Management expects F3Q26 revenue to be $340MM, up significantly versus expectations,” Bolton wrote in a note to clients. “In turn, we raise our FY27 revenue estimate by $350MM (from $1.25BN to $1.60BN); 2) CRDO's revenue is diversifying with four customers >10% of revenue in F2Q26 (at 42%, 24%, 16% and 11%). CRDO is ramping with a fifth customer and expects that it also has the potential to be a 10%+ customer longer-term; and, 3) Management highlighted three pillars of growth beyond [active electrical cables]: ZeroFlap Optics, ALCs, and OmniConnect Gearboxes, further expanding CRDO's [total addressable market].”
J.P. Morgan analyst Joseph Cardoso also reiterated his Overweight rating on Credo and upped his price target to $230 from $165 after the results.
“While the visibility into strong and diversifying AEC momentum also underpins the outlook for mid-single-digit sequential growth through FY27, the outlook for next year and beyond is also bolstered by additional opportunities, including the continued ramp of Optical DSP revenue, 'meaningful' PCIe revenue in FY27, 'initial' optical transceiver revenue in FY27, and 'initial' ALC and OmniConnect gearbox revenue in FY28, all of which are expected to support a TAM of $10B+ (more than triple the TAM from 18 months ago),” Cardoso wrote in a note to clients.
Amid the strong momentum and much larger market, investors should have increased confidence in the durability of the multi-year growth trajectory, and the potential for more upside, Cardoso added.
Several other investment firms also raised their price targets on Credo, including Susquehanna, Mizuho Securities and Stifel. |
