TLDR
- Credo Technology Group (CRDO) stock rallied 10.8% Monday to $123.41 after announcing Q3 revenue guidance of $404-$408 million versus prior forecast of $335-$345 million
- Second quarter results beat expectations with EPS of $0.67 compared to estimates of $0.49, while revenue of $268 million climbed 272% year-over-year
- Wall Street firms lifted price targets to between $165 and $240, with consensus rating “Moderate Buy” and average target at $216.54
- The company forecasts fiscal 2026 revenue growth exceeding 200% year-over-year driven by AI infrastructure demand
- Insiders sold $136.6 million worth of shares last quarter but retain 11.84% ownership stake
Credo Technology Group (CRDO) stock jumped 10.8% Monday following the company’s announcement of preliminary Q3 revenue guidance that demolished analyst forecasts. Trading volume reached 8.05 million shares, up 17% from the daily average.
Credo Technology Group Holding Ltd, CRDO
The chipmaker revealed it expects third-quarter fiscal 2026 revenue between $404 million and $408 million. This handily beats the company’s original guidance range of $335 million to $345 million and surpasses the $341.2 million analyst consensus.
The massive guidance raise highlights Credo’s accelerating momentum. Over the past year, revenue has soared 224% as data center operators rush to upgrade connectivity infrastructure for AI workloads.
Quarterly Results Exceed Expectations
Recent financial performance demonstrates why investors are piling into the stock. Credo delivered second-quarter earnings per share of $0.67, beating the Street’s $0.49 estimate by $0.18.
Quarterly revenue came in at $268.03 million compared to analyst projections of $234.99 million. The year-over-year comparison shows even more dramatic growth, with revenue up 272.1% from the prior-year period.
Profitability metrics remain strong with net margin at 26.63% and return on equity reaching 25.28%. The company maintains gross margins near 67% and return on assets above 20%.
Looking ahead to Q4, management projects sequential revenue growth in the mid-single digits. At this pace, full fiscal 2026 revenue growth would exceed 200% year-over-year.
Complete third-quarter results will be released during the earnings call scheduled for March 2, 2026 at 2:00 p.m. Pacific Time.
Price Target Increases Pile Up
Analyst enthusiasm hit new heights following the revenue guidance announcement. Multiple firms rushed to boost their price targets on the stock.
Susquehanna increased its target from $165 to $175 while maintaining a positive rating. Bank of America made a more aggressive move, raising its target from $165 all the way to $240.
Mizuho bumped its target from $165 to $225 with an outperform rating. Wolfe Research established a $240 price objective. TD Cowen kept its buy rating intact.
The stock carries a “Moderate Buy” consensus with one Strong Buy rating, eleven Buy ratings, and three Hold ratings. At $216.54, the average price target implies roughly 75% upside potential.
Needham placed Credo on its Conviction List as a Top Pick for 2026 with a $220 target. The firm expects continued estimate beats driven by Active Electrical Cable adoption and new product launches.
Rosenblatt Securities started coverage with a Neutral rating and $170 price target.
Executive Stock Sales Continue
Despite robust business performance, company leaders have been selling shares. CEO William Joseph Brennan offloaded 50,000 shares on December 11th at an average price of $153.16, netting $7.66 million.
CTO Chi Fung Cheng sold 55,000 shares on December 8th at $174.70 per share for proceeds of $9.61 million. Combined insider sales totaled 917,976 shares valued at $136.57 million during the last quarter.
Company insiders maintain an 11.84% ownership stake. Institutional investors hold 80.46% of shares outstanding.
The company’s market capitalization stands at $22.29 billion. Shares trade at a P/E ratio of 97.72 with a beta of 2.65.
Technical indicators show the 50-day moving average at $144.08 and the 200-day moving average at $142.69.
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