Updated: December 9, 2025 – All figures in USD unless noted. This article is for information only and is not investment advice.
CRDO stock snapshot on December 9, 2025
Credo Technology Group Holding Ltd (NASDAQ: CRDO) is trading around $170.73 per share today, giving the AI-focused connectivity specialist a market capitalization of roughly $32.5 billion. The stock is down about 4–5% intraday but remains up massively over the past year. [1]
Over the last 12 months, CRDO has rallied by roughly 140%, and even after today’s pullback it sits just over 20% below its recent all‑time high of $213.80 reached on December 2. [2]
Key current metrics:
- Price: ~$170.7
- 52‑week range: ~$29.09 – $213.80 [3]
- Market cap: ~$32.46B
- Trailing EPS: ~$1.16; P/E: ~153× – a very rich multiple compared with the broader semiconductor sector. [4]
That premium valuation is the central question around CRDO today: can its AI-driven growth justify one of the highest earnings multiples in its peer group?
Blowout Q2 FY2026: Credo’s biggest quarter ever
On December 1, 2025, Credo reported results for its second quarter of fiscal 2026 (ended November 1, 2025) – and the numbers were exceptional even by AI boom standards. [5]
Headline Q2 FY2026 results:
- Revenue: $268.0M
- +20.2% quarter‑over‑quarter
- +272.1% year‑over‑year [6]
- GAAP gross margin: 67.5%
- Non‑GAAP gross margin: 67.7% [7]
- GAAP net income: $82.6M (≈31% GAAP net margin) [8]
- Non‑GAAP net income: $127.8M, implying a non‑GAAP net margin near 48%. [9]
- Non‑GAAP EPS (diluted): $0.67, handily beating analyst expectations. [10]
- Cash & short‑term investments: $813.6M, with no meaningful debt. [11]
Management highlighted that this was the strongest quarter in Credo’s history, explicitly tying the growth to the rapid build‑out of large AI training and inference clusters at hyperscale data‑center customers. [12]
The core revenue engines remain:
- Active Electrical Cables (AECs)
- High‑speed integrated circuits (ICs)
- SerDes and optical DSP products
MarketBeat described the quarter as “game‑changing,” noting that revenue growth exceeded 270% year over year and that margins expanded at both the gross and operating level. [13]
Guidance shock: Q3 FY2026 outlook far above Wall Street expectations
If Q2 was impressive, Q3 FY2026 guidance is what really electrified investors:
- Q3 revenue guidance:$335M–$345M
- Midpoint of $340M implies ~26% sequential growth and about 150% growth year‑over‑year. [14]
- Non‑GAAP gross margin guidance:64.0–66.0% [15]
Analysts had been expecting something closer to $250M for the quarter, which means Credo guided roughly 50% above consensus on revenue – a rare upside surprise even in the AI hardware space. [16]
Simply Wall St’s analysis emphasizes how this raised guidance reinforces the “near‑term revenue catalyst” from AI infrastructure spending, but also significantly raises the bar for future quarters; a slowdown in hyperscaler orders could quickly translate into more volatile results. [17]
What Credo actually does in the AI stack
Unlike GPU vendors like Nvidia and AMD, Credo is a “picks and shovels” play on AI infrastructure. Its products are the high‑speed plumbing that lets AI clusters move massive volumes of data among chips, servers, and racks.
Key product areas include: [18]
- Active Electrical Cables (AECs):
Connect switches, servers, and accelerators across data centers, designed to support next‑gen 1.6T Ethernet links and lossless RDMA fabrics for AI. - SerDes chiplets (224G PAM4 on TSMC N3):
New 224G PAM4 SerDes chiplets built on TSMC’s 3nm node help data centers reach 1.6 Tbps per port – a key threshold for upcoming AI and hyperscale deployments. [19] - Optical DSPs (Dove, Lark, Bluebird families):
- The Dove 800 family (800G/400G optical DSPs with integrated drivers) targets hyperscale 400G and 800G modules with competitive power and performance. [20]
- Lark 850 powers 800G transceivers under 10W. [21]
- Bluebird 1.6T optical DSP supports 224Gbps per lane while enabling 1.6T transceivers to stay well below 20W – a crucial advantage in dense AI racks. [22]
- ZeroFlap optics and AECs:
New ZeroFlap optical modules and AECs aim to eliminate link “flaps” (brief failures) in large‑scale AI clusters, using telemetry and diagnostics to improve reliability. [23] - PCIe Gen6 retimers (“Toucan”) and telemetry (“PILOT”):
PCIe Gen6 retimers extend link distances between GPUs, SmartNICs, and storage, while the PILOT telemetry platform offers system‑level visibility into link behavior. [24]
Credo’s participation in Arm Total Design further underlines its strategy of embedding itself in custom silicon platforms for AI data centers, not just plug‑in cables and modules. [25]
How the market reacted: from pre‑earnings surge to post‑high pullback
CRDO was already in motion before earnings. Insider Monkey noted that the stock rose by more than 8% in the run‑up to the Q2 release as investors positioned for a beat. [26]
After the numbers hit:
- Zacks reports that the stock jumped about 10.6% following the Q2 print, hitting a new 52‑week high of $213.80 on December 2. [27]
- Over the past month, CRDO has outperformed both the semiconductor industry and the broader technology sector, though recent sessions have seen profit‑taking. [28]
- Social‑media chatter and options activity picked up notably after the earnings beat, according to QuiverQuant’s news summary. [29]
Today’s ~4–5% pullback around $171 leaves the stock roughly 20% off its peak, but still dramatically above its levels earlier in 2025 (52‑week low near $29). [30]
Several trading‑oriented outlets frame CRDO as a high‑beta AI momentum name: StocksToTrade, for example, highlighted its “impressive climb” and strong intraday moves as it broke to new highs after earnings. [31]
Analyst ratings and price targets: wide but bullish range
Despite the big run, Wall Street remains broadly bullish on CRDO – but forecasts vary widely depending on the data provider.
Consensus views
- StockAnalysis.com:
- 11 covering analysts
- Consensus rating: Strong Buy
- Average 12‑month price target:$179.91
- Target range: $84 – $250 [32]
- MarketBeat stock‑forecast summary:
- 16 analysts
- Average target: about $206.85
- High target: $250; low: $84
- Overall rating: Buy [33]
- Fintel/Nasdaq target compilation:
- Average one‑year price target recently raised 30.9% to $219.11
- Range: $136.35 – $262.50
- Implies roughly 24% upside from a recent closing price near $176. [34]
- Benzinga analyst‑ratings digest:
- Latest update from Roth Capital on December 2 set a $250 target (up from $170), implying roughly 46% upside from early‑December levels.
- In total, 38 analyst firms have issued ratings over the past year, skewed heavily toward Buy/Strong Buy. [35]
A separate MarketBeat flash note focusing on Bank of America’s upgrade reports that BofA raised its target from $165 to $240 and that Barclays lifted its target from $165 to $220, both with overweight/buy ratings. That report also cites a consensus around $191.17 based on a broader sample, with 1 Strong Buy, 14 Buy, and 2 Hold ratings – still solidly positive. [36]
In short, most published targets cluster between roughly $180 and $220, with high‑end calls at $240–$250 and a few outliers as low as $84. From today’s ~$171 share price, that implies anything from low‑single‑digit to mid‑twenties percentage upside over the next 12 months, assuming these forecasts prove accurate. [37]
Ownership: institutions in control, insiders taking profits
Ownership structure is another key piece of the CRDO story:
- Institutional investors control a large majority of the float.
A recent Yahoo Finance piece estimated institutional ownership at around 73%, while MarketBeat’s data puts it above 80%. [38] - Insider ownership remains meaningful but has been trending down.
Simply Wall St’s December “insider‑owned growth leaders” list pegs insider ownership at about 10.4%, with revenue and earnings expected to grow at roughly 24% and 28% per year respectively. [39] - Heavy insider selling in 2025.
MarketBeat’s price‑target note flags that insiders sold about 973,000 shares last quarter (roughly $149M in value), including sizable sales by the CFO and COO. [40]
Some investors may read the high institutional stake as validation of Credo’s business model, while others may treat the sizable insider selling as a cautionary signal given the elevated valuation.
Forecasts & fundamental outlook through 2028–2030
Beyond the next quarter, various research platforms have published medium‑term forecasts:
- Simply Wall St narrative model:
- Projects revenue reaching around $1.0 billion and earnings of about $314.5M by 2028, which would require roughly 34% annual revenue growth from current levels.
- Its fair‑value estimate is around $162.93, suggesting modest downside (~9%) from today’s price, even while acknowledging strong growth prospects. [41]
- Simply Wall St growth‑leaders report:
- Expects revenue to grow about 24.2% per year and earnings about 28% per year over the next few years. [42]
- Yahoo Finance “141% jump” coverage:
- Cites consensus projections that ramp annual revenue from roughly $270M in 2026 to nearly $890M by 2030, underlining expectations for sustained AI‑driven demand (though some of these estimates now look conservative relative to Credo’s latest run‑rate). [43]
- Nasdaq’s deep‑dive analysis:
- Notes that in the first half of FY2026 alone, revenue surged 273% year‑over‑year to $491M, with adjusted operating margins in the mid‑40% range – a level more typical of software than hardware. [44]
Taken together, third‑party models generally assume high‑20s to mid‑30s percent annual growth for revenue and earnings for several years, with profitability staying elevated. Those assumptions are central to justifying today’s ~150× trailing P/E.
What current commentary is saying about the stock
Recent articles and research notes offer a spectrum of views:
- MarketBeat (“Blowout Quarter—Here’s What’s Next”)
Emphasizes that Q2 results and Q3 guidance prove the “AI trade is far from over,” highlighting non‑GAAP net margins around 48%, strong cash generation, and institutional ownership above 80%. Their compiled analyst targets average about $206.85, with some as high as $240. [45] - Zacks / Finviz (“Hold or Make an Exit?”)
Acknowledges one of the “strongest quarters” in Credo’s history and a sharp post‑earnings rally, but frames the key question as whether to continue riding the momentum or lock in profits, especially after the stock hit a new high. [46] - Nasdaq (“Is This a Top AI Play for 2026?”)
Describes Credo’s products as the “plumbing fixtures” of modern data centers and underscores the importance of its 224G SerDes chiplets and AECs in enabling 1.6T ports. The article is constructive on long‑term growth but flags customer concentration and cyclical hyperscaler capex as real risks. [47] - Simply Wall St (“Surging Profitability and Raised Outlook”)
Highlights how the earnings beat and higher Q3 guidance strengthen the bullish narrative but warns that expectations are now very high and that any slowdown in AI data‑center build‑outs could hit revenue hard. It also suggests the shares may be trading at a premium to fair value. [48] - Seeking Alpha (earnings review and “Is It Too Late To Buy?”)
Generally positive on the fundamentals and impressed by the Q3 guidance, but some contributors question whether late‑arriving investors are now paying too much for growth that is increasingly priced‑in, especially with potential for multiple compression if AI spending normalizes. [49] - Motley Fool / MarketWatch–linked coverage
Portrays Credo as a textbook AI “picks and shovels” winner, but notes that despite the enthusiasm, some top‑stock lists still favor other opportunities – a subtle reminder that valuation and cyclicality matter. [50]
Valuation and key risks
At around 150× trailing earnings and a share price that has more than doubled over the past year, CRDO is priced for very high expectations. [51]
The main risks that analysts and commentators keep coming back to are: [52]
- Hyperscaler capex cyclicality
- Credo is heavily exposed to a relatively small group of large cloud and AI customers. If AI spending slows or deployment cycles pause, revenue could swing sharply.
- Customer concentration & competition
- A handful of big tech companies dominate its customer base. At the same time, Credo competes with other connectivity specialists and vertically integrated OEMs. Any loss of design wins could hurt both growth and margins.
- Valuation & multiple risk
- Even bullish models often show limited upside at current prices unless high‑growth assumptions play out perfectly. A shift in market sentiment or interest‑rate expectations could compress multiples, particularly for high‑beta names like CRDO.
- Insider selling & volatility
- Significant insider sales and high share‑price volatility underscore that insiders are happy to realize gains and that the stock can move sharply in both directions.
- Macro backdrop and rates
- As Investopedia notes, the Federal Reserve is expected to cut rates for the third time this year, which generally supports high‑growth stocks – but rate decisions and macro data can also trigger sharp risk‑on/risk‑off swings, amplifying volatility in names like CRDO. [53]
How CRDO fits into an AI‑themed portfolio (not advice)
From a thematic standpoint, Credo has emerged as one of the purest public plays on AI data‑center connectivity:
- Revenue growth is currently triple‑digit year‑over‑year. [54]
- Gross margins are in the mid‑60s and non‑GAAP net margins near 50%. [55]
- The balance sheet is cash‑rich and essentially debt‑free. [56]
- Product roadmaps (ZeroFlap optics, Bluebird/Lark DSPs, SerDes on 3nm, PCIe Gen6) are tightly aligned with the next generation of AI clusters. [57]
For growth‑oriented investors, CRDO is being framed by many analysts as a high‑quality “picks and shovels” name with a long runway if AI infrastructure spending persists. [58]
For value‑sensitive or risk‑averse investors, the same stock may look too expensive and too dependent on a very hot theme, especially given insider selling and the possibility that capex cycles normalize. [59]
Bottom line
As of December 9, 2025, Credo Technology Group sits at the center of the AI networking boom:
- Q2 FY2026 results delivered 272% year‑over‑year revenue growth and record profitability. [60]
- Q3 FY2026 guidance is dramatically above Wall Street expectations, signaling management’s confidence in continued AI infrastructure demand. [61]
- Analysts remain overwhelmingly positive, with consensus price targets generally above the current price – though the spread between low and high estimates is wide. [62]
- The stock trades at a premium valuation that leaves little room for missteps if AI spending decelerates or competition intensifies. [63]
For anyone following CRDO, the coming quarters will likely hinge on whether hyperscalers continue to aggressively deploy 1.6T‑class AI clusters – and whether Credo can maintain its technological and execution edge while growing into its valuation.
Disclosure: This article is for informational and educational purposes only. It does not constitute financial product advice, a recommendation to buy or sell any security, or an assessment of whether any investment is suitable for any particular person. Always do your own research and consider consulting a licensed financial adviser before making investment decisions.
References
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