The next U.S. trading session (Friday, December 26, 2025) comes right after the Christmas market closure, with Dec. 24 having been an early-close session and Dec. 25 a full holiday close. That matters for any stock with momentum and volatility—Credo Technology Group Holding Ltd (NASDAQ: CRDO) very much included—because post-holiday liquidity can be thinner and price swings can be sharper than usual. [1]
Below is what investors and traders should have on their radar before the bell, based on the latest filings, company updates, and Wall Street analysis available as of the last completed session.
Where CRDO last traded and why the next open could be jumpy
CRDO last traded at $150.19 (last completed session: Dec. 24), after opening around $147.08 and moving between roughly $146.81 and $151.88. Volume in that session was about 2.0 million shares.
That snapshot is important because:
- Price discovery on Dec. 26 has to digest several days of news flow (and positioning) without the usual continuous market feedback loop.
- Credo has been a high-beta, sentiment-sensitive name in the “AI infrastructure” trade, and those names can move quickly when liquidity is thinner. [2]
The biggest fundamental driver: a blowout quarter and a bigger guide
Q2 FY2026 results: record revenue, strong margins, big profitability
Credo’s most important “fresh” catalyst remains its Q2 FY2026 report (quarter ended Nov. 1, 2025), released Dec. 1. Highlights included:
- Revenue: $268.0 million (+20.2% QoQ, +272.1% YoY)
- GAAP gross margin: 67.5% (non-GAAP 67.7%)
- GAAP net income: $82.6 million (non-GAAP $127.8 million)
- GAAP diluted EPS: $0.44 (non-GAAP $0.67)
- Cash & short-term investments: $813.6 million [3]
Management explicitly tied the record quarter to the ongoing buildout of massive AI training and inference clusters—and positioned the company as a connectivity beneficiary, not just an AI “chip” story. [4]
Q3 FY2026 outlook: strong revenue jump, but watch the margin guide
For Q3 FY2026, Credo guided:
- Revenue: $335 million to $345 million
- GAAP gross margin: 63.8% to 65.8% (non-GAAP 64.0% to 66.0%)
- GAAP operating expenses: $116.0 million to $120.0 million (non-GAAP $68.0 million to $72.0 million) [5]
At the midpoint, the revenue guide implies roughly ~27% sequential growth versus Q2’s $268.0 million—a key reason the stock has been treated as a “must-watch” AI networking winner. [6]
But there’s a nuance sophisticated investors are watching closely: gross margin is guided lower than Q2’s 67.5% GAAP level. That doesn’t automatically mean “bad news” (mix shifts and ramp dynamics can do this), but it can become a talking point in a stock priced for excellence. [7]
Why Credo is in the AI spotlight: AECs now sit on the critical path
Credo sells high-speed connectivity solutions spanning optical and electrical Ethernet (100G through emerging 1.6T), including Integrated Circuits, Active Electrical Cables (AECs), SerDes chiplets, and SerDes IP licensing. [8]
A widely cited piece of the bull case is that AECs are increasingly being used as a standard for short-reach, rack-to-rack connectivity because they can offer meaningful power advantages versus optical—and because reliability and signal integrity become existential at hyperscale AI cluster sizes. Zacks’ analysis published on Nasdaq highlighted Credo’s view that AECs are replacing certain optical connections (up to several meters) as AI clusters scale. [9]
This “plumbing for AI” angle has repeatedly been called out in the financial press as a major reason CRDO has traded like an AI momentum name rather than a traditional smaller-cap semiconductor supplier. [10]
Customer concentration is improving, but it’s still a risk investors must price in
Two things can be true at once with Credo:
- The company has been diversifying its hyperscaler footprint.
- The revenue base can still be concentrated enough to amplify volatility if a major customer pauses.
Recent analysis on Nasdaq (Zacks) described a quarter where multiple hyperscalers contributed meaningfully to revenue and suggested the customer base was broadening further. [11]
At the same time, MarketWatch reported that Credo’s largest customer accounted for 42% of sales in the latest quarter (with the analyst cited in the piece suspecting the customer may be Amazon). [12]
And historically, the concentration risk has been extremely real: in fiscal 2025, Credo disclosed that one customer accounted for 67% of total revenue and top 10 customers were ~90%. [13]
For the Dec. 26 open, the practical takeaway is simple: CRDO tends to trade like a “hyperscaler capex proxy.” Any broad shift in AI infrastructure sentiment can move the stock quickly.
Insider selling: what the SEC filings show (and why the context matters)
One of the newest headlines into the Dec. 26 session is insider selling, which can affect near-term sentiment—especially after a sharp run.
CTO sales under a 10b5-1 plan
SEC filings show Credo’s Chief Technology Officer Cheng Chi Fung reported sales on:
- Dec. 22, 2025:55,000 ordinary shares sold in multiple transactions, with weighted-average prices in the roughly $149–$156 range, with the filing noting the sales were under a Rule 10b5-1 trading plan adopted Sept. 6, 2024. [14]
- Dec. 15, 2025: similarly, 55,000 ordinary shares sold in multiple transactions (also flagged as 10b5-1 plan activity). [15]
Why it matters: even when sales are pre-planned, markets often react to insider selling headlines in momentum stocks. The counterpoint is also important: the filings explicitly frame these as planned sales, which many investors treat differently than discretionary selling. [16]
Product and strategy headlines still in play
While earnings and guidance dominate, Credo has also built a steady cadence of product and strategic announcements that reinforce its “platform” narrative:
- AEC patent licensing agreement with The Siemon Company (terms confidential). This is notable because it highlights Credo’s posture around IP in AEC technology—an area central to the company’s current growth engine. [17]
- Hyperlume acquisition: Credo announced the closing of its acquisition of Hyperlume, Inc., positioning it as a way to add microLED-based optical interconnect technology for chip-to-chip communication, aimed at future AI-driven data infrastructure needs. Financial terms were not disclosed in the release. [18]
- ZeroFlap optics launch: Credo introduced ZeroFlap optical transceivers positioned around reliability improvements for optics in AI networks, built around its diagnostics platform and targeting 400G/800G/1.6T speeds. [19]
Investors focused on 2026 and beyond will often ask: How much of the current valuation is justified by today’s AEC ramp versus “next pillars” like optics and newer system-level products? Management has explicitly referenced upcoming ramps of newer product categories alongside core AEC and IC franchises. [20]
Wall Street forecasts and ratings: bullish tone, but valuation is the recurring debate
Analysts largely stayed constructive after the Q2 print
After the Dec. 1 earnings report and big guide, multiple firms were listed as maintaining ratings around Dec. 2, 2025 (including Mizuho, BofA Securities, Barclays, and Needham, among others). [21]
Needham specifically was reported (in widely circulated summaries) to have raised its price target while keeping a Buy stance in early December. [22]
The bullish growth math is clear—so is the valuation tension
Zacks’ analysis on Nasdaq pointed to expected sequential revenue acceleration and projected very high fiscal-year growth rates, framing Credo as a standout in AI connectivity. [23]
But the same analysis also highlights the valuation issue: Credo has been trading at a much higher forward Price/Sales multiple than the broader semiconductors peer set (as cited by Zacks). [24]
In other words, the market’s stance has looked like: “We believe the growth—but you don’t get to miss.” Any sign of slowing hyperscaler demand, margin compression beyond expectations, or product ramp hiccups can get punished.
Short interest and positioning: not extreme, but relevant in a momentum name
Credo has periodically been discussed as a possible short-squeeze candidate in AI-adjacent rallies, according to MarketWatch reporting in early December. [25]
On the data side, Yahoo Finance key statistics (dated 11/28/2025) showed:
- Shares short around 8.58M
- Short ratio about 1.43
- Short % of float about ~5.36% [26]
That’s not “meme stock” territory, but it’s enough that fast upside moves—especially in thin holiday liquidity—can force repositioning.
What to watch specifically at the Dec. 26 open: a practical checklist
Here are the most actionable things to monitor into the opening prints:
1) Any follow-through from insider-selling headlines
Even planned 10b5-1 sales can create negative reflex reactions in premarket chatter. If CRDO opens weak but stabilizes quickly, that can be read as “selling absorbed.”
2) Guidance digestion: revenue beats expectations, margins invite questions
The market loved the $335–$345M revenue outlook. The margin outlook (lower than Q2) is the kind of detail that can drive intraday narrative shifts—especially if macro risk-off hits semis. [27]
3) Big-tech AI sentiment (Broadcom/Marvell/Astera Labs read-throughs)
Credo often trades as part of a broader “AI networking/connectivity” basket. Zacks’ analysis explicitly frames the competitive landscape alongside larger peers in AI infrastructure. [28]
4) Liquidity reality after the holiday
The Dec. 26 session is immediately after a holiday closure; intraday moves can be exaggerated as larger participants re-enter. [29]
5) Next catalyst calendar: earnings timing
Consensus earnings calendars currently point to early March 2026 for the next report window (noting dates can change). [30]
Bottom line for Dec. 26: CRDO remains a high-momentum AI infrastructure stock—now with “expectations risk”
Credo heads into the Dec. 26 open with:
- A strong fundamental narrative (explosive growth and a big forward revenue guide) [31]
- A platform expansion story (optics, new interconnect approaches, and M&A like Hyperlume) [32]
- Headline sensitivity (insider sales filings, customer concentration debates) [33]
- And a valuation level that leaves less room for error, as even bullish research notes acknowledge. [34]
For traders, that combination often equals bigger moves. For longer-term investors, it reinforces the key question: Can Credo sustain hyperscaler-driven AEC momentum while successfully monetizing its “next pillars” without sacrificing profitability? [35]
This article is for informational purposes only and does not constitute investment advice.
References
1. www.nasdaqtrader.com, 2. www.marketwatch.com, 3. investors.credosemi.com, 4. investors.credosemi.com, 5. investors.credosemi.com, 6. investors.credosemi.com, 7. investors.credosemi.com, 8. investors.credosemi.com, 9. www.nasdaq.com, 10. www.marketwatch.com, 11. www.nasdaq.com, 12. www.marketwatch.com, 13. www.sec.gov, 14. www.sec.gov, 15. www.sec.gov, 16. www.sec.gov, 17. investors.credosemi.com, 18. www.businesswire.com, 19. www.businesswire.com, 20. investors.credosemi.com, 21. www.marketwatch.com, 22. www.marketbeat.com, 23. www.nasdaq.com, 24. www.nasdaq.com, 25. www.marketwatch.com, 26. finance.yahoo.com, 27. investors.credosemi.com, 28. www.nasdaq.com, 29. www.nasdaqtrader.com, 30. www.zacks.com, 31. investors.credosemi.com, 32. www.businesswire.com, 33. www.sec.gov, 34. www.nasdaq.com, 35. investors.credosemi.com
