SAN JOSE, California, September 2, 2026, 18:50 EDT
- Credo finished the session at $165.22, falling 20.04%, with 29.94 million shares traded.
- Revenue for the quarter increased by 114.7%, but GAAP gross margin declined by 3.7 points from the previous quarter.
- The share price continues to value Credo at almost 14.6 times the annualized midpoint of expected sales for the next quarter.
Shares of Credo Technology Group Holding Ltd NASDAQ:CRDO fell by 20.04% on Wednesday. The decline wiped out $41.41 per share, even as the company reported record revenue for the quarter. Trading volume hit 29.94 million shares, exceeding its usual average by over six times.
The decline highlighted a steep valuation. Credo closed with a market capitalization of $31.05 billion, which amounts to roughly 14.6 times the straightforward annualization of management’s midpoint revenue estimate for next quarter. This calculation is not based on company guidance.
Credo’s September 2 price range
Regular-session prices, U.S. dollars. As of .
Source: Google Finance. Range does not imply the order of intraday highs and lows.
The company posted fiscal first-quarter revenue of $479.0 million. Sales climbed 114.7% year-on-year and increased 9.6% from the prior quarter. Adjusted earnings stood at $1.20 per diluted share. Both revenue and adjusted earnings surpassed consensus forecasts.
Margins made for a tougher comparison. GAAP gross margin dropped to 64.5% from 68.2% sequentially. The non-GAAP gross margin dipped just 0.3 point to 68.0%. The difference reflects $11.0 million in amortization of acquired intangibles.
Gross-margin bridge
Percent of revenue. Q2 uses the midpoint of Credo’s ranges. Source: Credo, September 1, 2026.
Credo’s Chief Executive Bill Brennan said the company’s portfolio covers “connectivity from millimeters to kilometers, with solutions across optics and copper.” He linked rising demand to broad AI infrastructure expansions. Credo submitted the results to U.S. regulators on Tuesday. SEC filing
Credo projects second-quarter revenue between $525 million and $535 million, with the midpoint suggesting sequential growth of 10.6%. GAAP operating expenses are anticipated to increase to a range of $199 million to $204 million. Non-GAAP operating expenses are forecast at $100 million to $105 million.
The market was left wanting. Shares began trading at $188.64, compared to their $206.63 close on Tuesday. From the opening on Wednesday to the market’s close, the stock dropped an additional 12.4%. During the session, they hit a low of $161.95.
Shares of Marvell Technology Inc NASDAQ:MRVL slipped 1.86%, while Astera Labs Inc NASDAQ:ALAB dropped 2.06%, showing much smaller moves by peers. The difference highlights a reset focused on the company instead of a wider selloff in connectivity stocks.
Analyst stance after the selloff
Ratings and 12-month targets from 14 analysts; prices in U.S. dollars. As of the September 2 close. Source: Google Finance.
Wall Street sentiment held positive following the drop. Out of 14 analysts surveyed, 13 had buy ratings for Credo. Their average price target was $292.08, while the lowest target, $235, was still 42% higher than Wednesday’s closing price.
That optimism now faces the challenge of concentration risk. Credo’s top four end customers accounted for 33%, 28%, 13% and 10% of revenue in the quarter. Combined, they contributed 84% of overall sales. Management anticipates that three or four customers will continue to account for more than 10% each.
Risks: Sales could be swiftly affected by a slower upswing from hyperscalers. Increasing research expenses may reduce operating leverage. Both risks are heightened by customer concentration.
The focus now shifts to execution rather than just language about demand. Investors need to see the $530 million revenue midpoint with an adjusted gross margin near 68%. If these targets are not met, there is limited downside protection at the current sales multiple.
