Semiconductor stock Credo Technology Group (CRDO) is breaking out big today, up 45% this afternoon to trade at new all-time highs after last night's fiscal second-quarter earnings report. CRDO stock is now up 259% on a year-to-date basis, and earlier soared to a new record high of $72.30.
The company reported impressive second-quarter earnings and record-setting revenue that exceeded analysts’ expectations, primarily due to heightened demand for its connectivity solutions in artificial intelligence (AI) data centers. Credo's innovative Active Electrical Cable (AEC) products and strategic positioning in the AI market are pivotal to its current success.
Investors were particularly encouraged by CEO Bill Brennan’s comments about an “inflection point” for the company on revenue. For Q3, the AI data center specialist guided for revenue between $115.0 million and $125.0 million, well above the $86.0 million consensus.
Alongside today’s surge in the stock, multiple analysts have raised their price targets and upgraded their ratings for CRDO, signaling confidence in its growth potential. Most notably, Bank of America’s Vivek Arya double-upgraded CRDO to “Buy” from “Underperform,” and raised the stock’s price target all the way to $80 from $27.
"Our prior cautious view was based on limited [total addressable market] assumptions for AEC, but CRDO’s earnings call addressed those concerns nicely, with 3x 10% customers (Microsoft, Amazon, Tesla), and growing momentum in other adjacent areas (optical DSP, line card PHY, retimer)," wrote Arya in a post-earnings note.
BofA’s new price target indicates expectations for the stock to rise another 14% from current levels.
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