Credo Technology Group Holding Ltd (CRDO) is a semiconductor company that specializes in high-speed connectivity solutions for data centers, cloud computing, and telecommunications infrastructure. CRDO performed exceptionally well in its fiscal Q2 FY2025 quarter, reporting a 64% YoY growth in revenue (to $72 million) with solid across all 3 of its main product lines. If Credo keeps growing its business at the pace we saw last fiscal year (and 2 past quarters), I think its stock price should trade well above $100 apiece.
While CRDO is benefiting from its innovative portfolio and growth in AI connectivity, competitive pressures and evolving challenges pose headwinds.
Credo Technology Group Holding Ltd's Ethernet solutions excel in high-speed, reliable, and power-efficient data transfer, crucial for AI and data centers, driving strong demand and growth. The company projects a 50% sequential revenue growth into fiscal Q4 2025, indicating rapid business traction and pulling forward growth by over two years. CRDO stock's valuation at 47x forward non-GAAP EPS is justified by its debt-free status, improving gross margins, and potential for significant free cash flow and net income growth.
Credo Technology is an SA Quant Top 10 Stock Pick for 2025. Credo, a fabless semiconductor company, offers significant growth potential despite a recent market sell-off, driven by robust data center demand and AI implementation. Credo's profitability is set to inflect positively in 2024, with revenue expected to jump 100%, driven by hyperscaler demand for data center build-outs.
Credo's AECs, optical DSPs, and line cards are gaining traction, with its 800G ZeroFlap AECs offering lower power use, cost savings, and improved reliability over laser-based optics. The first reason for my bullishness is CRDO's margins - they're likely to expand in the next few years (the ones below gross margins) and drive massive EPS growth. The second reason for my bullishness is the end market's prospects and the massive TAM (about $1 trillion by 2031) that Credo might gain from.
Shares of Credo Technology (CRDO 0.51%), which makes high-speed connectivity solutions for the data infrastructure market, skyrocketed 245% in 2024, according to data from S&P Global Market Intelligence. (In 2025, Credo stock is down 3.2% through Tuesday, Jan. 14.
Shares of Credo Technology Group (CRDO -1.77%) rallied 37.3% in December, according to data from S&P Global Market Intelligence.
MoneyShow presents top investment ideas for 2025 from their contributors. This year's edition presents a broad mix of theme-based stock picks, momentum-driven high-flyers and beaten-up stocks with turnaround potential, along with some speculative plays and ETFs. Part 1 of this series includes Domino's Pizza, Hercules Capital, Credo Technology, Clearway Energy, Verizon, Duke Energy and Essential Utilities, among others.
CRDO's strong portfolio of Active Electrical Cables and Digital Signal Processor solutions make it a long-term pick.
Stifel analyst Tore Svanberg raised the firm's price target on Credo Technology to $80 from $75 and keeps a Buy rating on the shares. In the Analog, Connectivity, and Processors sector, the firm lists Credo as one of the most attractive stocks in its coverage due to being a key AI infrastructure beneficiary, the analyst tells investors.
Credo Technology Group is well-positioned to benefit from AI and data center growth. The company reported very strong quarterly results and provided revenue guidance that significantly exceeded expectations. Despite a premium valuation, Credo's strong revenue growth, improving margins, and multi-year AI tailwinds make it a compelling investment, especially on pullbacks.
From a closing share price just over $40 on November 11, to Friday's close just a nickel short of $76, Credo Technology (Nasdaq: CRDO) stock has been on an absolute tear this past month, gaining roughly 90% in just over 30 days.