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Credo Technology Surges 144% in 3 Months: Is the Stock Still a Buy?
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Key Takeaways
CRDO shares have jumped 144% in three months, nearing its 52-week high on strong AI-driven product demand.
AECs, optical DSPs and retimers continue to witness traction, driving $436.8M in revenues in fiscal 2025.
CRDO projects over $800M in fiscal 2026 revenues amid tariff and market risks.
Credo Technology Group Holding Ltd (CRDO - Free Report) has been on a tear, with the stock appreciating 144.2% over the past three months. Riding on momentum fueled by AI proliferation and increasing demand for faster and energy-efficient connectivity solutions, CRDO stock is now trading near its 52-week high of $95.71. It closed last trading session at $93.36.
Investors are likely to contemplate what to do next, whether it is time to take profits or if there is more room to run. Let’s dive deep and ascertain the best course of action for your portfolio.
CRDO’s Multiple Tailwinds as it Rides the AI Wave
At the heart of Credo’s business lies its Active Electrical Cables (AEC) product line, which posted double-digit sequential growth in the fiscal fourth quarter of 2025. AEC is gaining traction owing to its increasing adoption in the data center market.
The demand for AECs is increasing as ZeroFlap AECs offer more than 100 times improved reliability than laser-based optical solutions. This made AECs an increasingly attractive option for data center applications, contributing to the new expansion of AEC usage and further solidifying Credo Technology’s position in the market. With demonstration of PCIe Gen6 AECs and increasing hyperscaler interest, this product line is expected to remain a growth engine going ahead.
Strength in the optical business, particularly Optical Digital Signal Processors (DSPs), is another key catalyst. CRDO achieved revenue targets for this business in fiscal 2025 and expects expansion of customer diversity across lane rates, port speeds and applications to accelerate revenue growth going ahead. CRDO announced that it achieved a key 800-gig transceiver DSP design win and unveiled ultra-low-power 100-gig per lane optical DSPs built on 5-nanometer technology.
CRDO expects its 3-nanometer 200-gig-per-lane optical DSP (port speeds up to 1.6 terabits per second) to boost the industry’s transition to 200-gig lane speeds. Supplementing these businesses is CRDO’s PCIe retimers and Ethernet retimers business. This particular product line continues to witness customer interest, especially for scale-out networks in AI servers. CRDO highlighted that the retimer business delivered “robust” performance in both the fiscal fourth quarter and fiscal 2025, driven by 50 gig and 100 gig per lane Ethernet solutions.
This growing demand underscores the increasing importance of high-performance solutions in the rapidly expanding AI server market. Shift to 100 gig per lane solutions and higher demand for system-level expertise and software capabilities for dealing with AI-optimized architectures bode well for CRDO’s retimer business.
CRDO Demonstrates Strong Performance & Outlook
Credo has seen explosive growth, with fiscal 2025 revenues reaching $436.8 million, representing a 126% year-over-year increase. In the fourth quarter of fiscal 2025, revenues surged 179.7% year over year to $170 million. Its revenues nearly tripled from the fiscal first to the fourth quarter, demonstrating its ability to respond to a key market shift.
Image Source: Zacks Investment Research
While top-line growth often grabs eyeballs, Credo’s strength lies in its margin profile and operational discipline. The company is not only driving substantial product momentum but also showcasing the profitability of its business model. In fiscal 2025, operating margin expanded 2,500 basis points, reflecting strong top-line leverage fueled by product growth.
For the first quarter of fiscal 2026, the company expects revenues between $185 million and $195 million, up 12% sequentially at the midpoint. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $190 million, suggesting growth of 218.2% from the year-ago quarter’s reported figure. Non-GAAP gross margin is projected at 64-66%, with operating expenses between $54 million and $56 million
For fiscal 2026, Credo anticipates revenues to surpass $800 million, implying more than 85% year-over-year growth. Non-GAAP operating expenses are expected to grow at less than half the revenue growth rate, driving non-GAAP net margin to nearly 40%. Strong AI-driven demand and solid execution supported its fiscal 2025 performance and continue to fuel momentum.
Given these tailwinds, analysts seem bullish as earnings estimates have been revised upwards in the past 60 days.
Image Source: Zacks Investment Research
Nonetheless, increasing market competition and macroeconomic uncertainties amid tariff troubles, may impact CRDO’s growth trajectory. Credo competes with semiconductor giants like Broadcom Inc. (AVGO - Free Report) and Marvell Technology, Inc. (MRVL - Free Report) .
CRDO Stock vs. Peers
CRDO’s 144.2% surge is also much higher than peers like Broadcom, Marvell and Cirrus Logic, Inc. (CRUS - Free Report) .
Price Performance
Image Source: Zacks Investment Research
Broadcom, Marvell and Cirrus Logic have gained 57.9%, 36.2% and 26.9%, respectively.
CRDO Trades at a Premium
In terms of the forward 12-month Price/Sales ratio, CRDO is trading at 18.96, higher than the Electronic-Semiconductors sector’s multiple of 8.60.
Image Source: Zacks Investment Research
In comparison, Broadcom trades at a forward 12-month P/S multiple of 17.89, while Cirrus Logic and Marvell are trading at a multiple of 3 and 6.99, respectively.
Buy CRDO for Now
In a market increasingly driven by AI tailwinds, CRDO stands out as a pure-play beneficiary with differentiated products, strong financials, and increasing demand. The recent 144% surge is justified by improving fundamentals, and the growth story seems far from over. Though it trades at a premium, with upbeat guidance and rising investor confidence, CRDO remains well-positioned for continued upside.
Image: Bigstock
Credo Technology Surges 144% in 3 Months: Is the Stock Still a Buy?
Key Takeaways
Credo Technology Group Holding Ltd (CRDO - Free Report) has been on a tear, with the stock appreciating 144.2% over the past three months. Riding on momentum fueled by AI proliferation and increasing demand for faster and energy-efficient connectivity solutions, CRDO stock is now trading near its 52-week high of $95.71. It closed last trading session at $93.36.
Investors are likely to contemplate what to do next, whether it is time to take profits or if there is more room to run. Let’s dive deep and ascertain the best course of action for your portfolio.
CRDO’s Multiple Tailwinds as it Rides the AI Wave
At the heart of Credo’s business lies its Active Electrical Cables (AEC) product line, which posted double-digit sequential growth in the fiscal fourth quarter of 2025. AEC is gaining traction owing to its increasing adoption in the data center market.
The demand for AECs is increasing as ZeroFlap AECs offer more than 100 times improved reliability than laser-based optical solutions. This made AECs an increasingly attractive option for data center applications, contributing to the new expansion of AEC usage and further solidifying Credo Technology’s position in the market. With demonstration of PCIe Gen6 AECs and increasing hyperscaler interest, this product line is expected to remain a growth engine going ahead.
Strength in the optical business, particularly Optical Digital Signal Processors (DSPs), is another key catalyst. CRDO achieved revenue targets for this business in fiscal 2025 and expects expansion of customer diversity across lane rates, port speeds and applications to accelerate revenue growth going ahead. CRDO announced that it achieved a key 800-gig transceiver DSP design win and unveiled ultra-low-power 100-gig per lane optical DSPs built on 5-nanometer technology.
CRDO expects its 3-nanometer 200-gig-per-lane optical DSP (port speeds up to 1.6 terabits per second) to boost the industry’s transition to 200-gig lane speeds.
Supplementing these businesses is CRDO’s PCIe retimers and Ethernet retimers business. This particular product line continues to witness customer interest, especially for scale-out networks in AI servers. CRDO highlighted that the retimer business delivered “robust” performance in both the fiscal fourth quarter and fiscal 2025, driven by 50 gig and 100 gig per lane Ethernet solutions.
This growing demand underscores the increasing importance of high-performance solutions in the rapidly expanding AI server market. Shift to 100 gig per lane solutions and higher demand for system-level expertise and software capabilities for dealing with AI-optimized architectures bode well for CRDO’s retimer business.
CRDO Demonstrates Strong Performance & Outlook
Credo has seen explosive growth, with fiscal 2025 revenues reaching $436.8 million, representing a 126% year-over-year increase. In the fourth quarter of fiscal 2025, revenues surged 179.7% year over year to $170 million. Its revenues nearly tripled from the fiscal first to the fourth quarter, demonstrating its ability to respond to a key market shift.
Image Source: Zacks Investment Research
While top-line growth often grabs eyeballs, Credo’s strength lies in its margin profile and operational discipline. The company is not only driving substantial product momentum but also showcasing the profitability of its business model. In fiscal 2025, operating margin expanded 2,500 basis points, reflecting strong top-line leverage fueled by product growth.
For the first quarter of fiscal 2026, the company expects revenues between $185 million and $195 million, up 12% sequentially at the midpoint. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $190 million, suggesting growth of 218.2% from the year-ago quarter’s reported figure. Non-GAAP gross margin is projected at 64-66%, with operating expenses between $54 million and $56 million
For fiscal 2026, Credo anticipates revenues to surpass $800 million, implying more than 85% year-over-year growth. Non-GAAP operating expenses are expected to grow at less than half the revenue growth rate, driving non-GAAP net margin to nearly 40%. Strong AI-driven demand and solid execution supported its fiscal 2025 performance and continue to fuel momentum.
Given these tailwinds, analysts seem bullish as earnings estimates have been revised upwards in the past 60 days.
Image Source: Zacks Investment Research
Nonetheless, increasing market competition and macroeconomic uncertainties amid tariff troubles, may impact CRDO’s growth trajectory. Credo competes with semiconductor giants like Broadcom Inc. (AVGO - Free Report) and Marvell Technology, Inc. (MRVL - Free Report) .
CRDO Stock vs. Peers
CRDO’s 144.2% surge is also much higher than peers like Broadcom, Marvell and Cirrus Logic, Inc. (CRUS - Free Report) .
Price Performance
Image Source: Zacks Investment Research
Broadcom, Marvell and Cirrus Logic have gained 57.9%, 36.2% and 26.9%, respectively.
CRDO Trades at a Premium
In terms of the forward 12-month Price/Sales ratio, CRDO is trading at 18.96, higher than the Electronic-Semiconductors sector’s multiple of 8.60.
Image Source: Zacks Investment Research
In comparison, Broadcom trades at a forward 12-month P/S multiple of 17.89, while Cirrus Logic and Marvell are trading at a multiple of 3 and 6.99, respectively.
Buy CRDO for Now
In a market increasingly driven by AI tailwinds, CRDO stands out as a pure-play beneficiary with differentiated products, strong financials, and increasing demand. The recent 144% surge is justified by improving fundamentals, and the growth story seems far from over. Though it trades at a premium, with upbeat guidance and rising investor confidence, CRDO remains well-positioned for continued upside.
CRDO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.