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    Is Credo’s Surging Profitability And Raised Outlook Altering The Investment Case For Credo Technology (CRDO)?

    Simply Wall St·12/09/2025 00:31:11
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    • In the past quarter, Credo Technology Group Holding Ltd reported a jump in revenue to US$268.03 million and moved from a small loss to US$82.64 million in net income, with earnings per share turning positive on both a basic and diluted basis.
    • Alongside these stronger results, Credo issued higher third-quarter fiscal 2026 revenue guidance of US$335 million to US$345 million, signaling management’s confidence in continued demand for its high-speed connectivity solutions.
    • With revenue and profitability sharply higher year on year, we’ll now examine how this earnings momentum could reshape Credo’s investment narrative.

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    Credo Technology Group Holding Investment Narrative Recap

    To own Credo, you need to believe that rising AI and cloud data traffic will keep driving demand for its high-speed, energy‑efficient connectivity products, and that the company can turn this demand into durable profitability despite intense competition and customer concentration. The latest earnings beat and sharply higher guidance reinforce the near term revenue catalyst, but also raise the bar for future growth at a time when expectations around hyperscaler spending are already very high.

    Among the recent announcements, the new revenue outlook of US$335 million to US$345 million for the third quarter of fiscal 2026 is most relevant, because it sits directly on top of the accelerating AI infrastructure buildout that has powered Credo’s recent momentum. It highlights how much the market is banking on continued hyperscaler orders and smooth adoption of Credo’s newer interconnect and optical platforms, even as any slowdown or pause in these deployment cycles could quickly feed through to more volatile revenue and earnings.

    Yet behind the strong quarter and confident guidance, investors should also be aware of the risk that hyperscaler capital spending or protocol upgrade cycles could...

    Read the full narrative on Credo Technology Group Holding (it's free!)

    Credo Technology Group Holding's narrative projects $1.0 billion revenue and $314.5 million earnings by 2028. This requires 33.8% yearly revenue growth and about a $262 million earnings increase from $52.2 million today.

    Uncover how Credo Technology Group Holding's forecasts yield a $162.93 fair value, a 9% downside to its current price.

    Exploring Other Perspectives

    CRDO 1-Year Stock Price Chart
    CRDO 1-Year Stock Price Chart

    27 members of the Simply Wall St Community value Credo anywhere from US$18.90 to US$208.93 per share, showing how far apart individual expectations can be. When you set those views against the reliance on a small group of large cloud customers, it underlines why exploring several competing scenarios for Credo’s future performance matters.

    Explore 27 other fair value estimates on Credo Technology Group Holding - why the stock might be worth less than half the current price!

    Build Your Own Credo Technology Group Holding Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.