TLDR
- Credo Technology Group (CRDO) stock surged 10.8% Monday after the company announced Q3 revenue guidance of $404-$408 million, far exceeding prior estimates of $335-$345 million
- The chipmaker reported Q2 earnings of $0.67 per share versus $0.49 expected, with revenue of $268 million up 272% year-over-year
- Analysts boosted price targets to as high as $240, with consensus rating at “Moderate Buy” and average target of $216.54
- Company projects over 200% year-over-year growth for fiscal 2026 as AI infrastructure demand accelerates
- CEO and CTO sold roughly $17.3 million in shares last quarter, though insiders maintain 11.84% ownership
Credo Technology Group (CRDO) stock rocketed 10.8% higher Monday after the company delivered preliminary third-quarter revenue guidance that crushed Wall Street expectations. Shares closed at $123.41 on volume of 8.05 million shares.
The connectivity solutions provider expects Q3 fiscal 2026 revenue between $404 million and $408 million. This destroys the company’s previous guidance of $335 million to $345 million and beats analyst consensus of $341.2 million.
Credo Technology Group Holding Ltd, CRDO
The upside surprise extends Credo’s explosive growth run. Revenue has jumped 224% over the past twelve months as demand for AI infrastructure connectivity solutions continues surging.
Earnings Beat Fuels Rally
Credo’s latest quarterly results showed strong execution across the board. The company posted earnings per share of $0.67, crushing analyst estimates of $0.49.
Revenue hit $268.03 million versus expectations of $234.99 million. Year-over-year revenue exploded 272.1% from the same quarter last year when earnings came in at just $0.07 per share.
The company maintained a net margin of 26.63% with return on equity at 25.28%. Gross profit margins stand near 67%.
Credo now projects mid-single digit sequential revenue growth for Q4. This pace would drive total fiscal 2026 growth above 200% year-over-year.
The company plans to report complete Q3 results on its March 2, 2026 earnings call at 2:00 p.m. Pacific Time.
Analysts Scramble to Raise Targets
Wall Street firms raced to boost price targets following the guidance update. Susquehanna raised its target from $165 to $175 with a positive rating.
Bank of America made a bigger jump, lifting its target from $165 to $240 with a buy rating. Mizuho increased its target from $165 to $225 with an outperform rating.
Wolfe Research set a $240 price objective on shares. TD Cowen reiterated its buy rating on the stock.
The consensus rating sits at “Moderate Buy” with one Strong Buy, eleven Buy ratings, and three Hold ratings. The average price target of $216.54 suggests 75% upside from current levels.
Needham named Credo a Top Pick for 2026 with a $220 target, citing increasing Active Electrical Cable adoption. Rosenblatt Securities initiated coverage with a Neutral rating and $170 target.
Insider Sales and Ownership
Company executives have been trimming positions despite strong performance. CEO William Joseph Brennan sold 50,000 shares December 11th at $153.16 per share for $7.66 million.
CTO Chi Fung Cheng sold 55,000 shares December 8th at $174.70 for $9.61 million. Total insider sales last quarter reached 917,976 shares worth $136.57 million.
Insiders still control 11.84% of outstanding shares. Institutional investors own 80.46% of the company.
Credo has a market cap of $22.29 billion and trades at a P/E ratio of 97.72. The stock’s beta sits at 2.65, indicating higher volatility than the broader market.
The 50-day moving average stands at $144.08 with the 200-day at $142.69. Return on assets exceeds 20%.
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