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TD Cowen raised its price target on Credo Technology Group Holding Ltd. (NASDAQ:CRDO) stock to $95.00 from $85.00 on Wednesday, while maintaining a Buy rating on the semiconductor connectivity company. The stock, currently trading near its 52-week high of $86.69, has delivered an impressive 173% return over the past year.
The research firm named Credo its "Best Smidcap Idea for 2025," citing significant growth potential in high-speed connectivity for datacenter AI applications. TD Cowen views Credo’s growth trajectory as "early, open-ended, and diversifying," underpinned by the company’s industry-leading SerDes IP. According to InvestingPro data, the company has demonstrated strong execution with a 126% revenue growth and maintains impressive gross profit margins of 65%.
Credo’s proprietary technology focuses on low-power, high-speed connectivity solutions that address expanding market opportunities driven by AI proliferation and faster line-rate speeds in both back-end and front-end networks. Despite Credo’s fiscal 2026 revenue tracking approximately four times higher than three years ago, TD Cowen believes the company’s growth story remains in early stages.
The research firm identified datacenter as the most attractive semiconductor end market, with networking infrastructure and connectivity expected to be the fastest-growing sub-segment within that space. Credo’s product portfolio includes Active Electric Cables, optical Digital Signal Processors, and other connectivity-related chipsets.
These products position Credo "squarely at the intersection" of rapidly growing industry verticals, according to TD Cowen’s analysis of the company’s market position and growth potential. For deeper insights into Credo’s valuation and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, featuring detailed analysis of the company’s financial health and market positioning.
In other recent news, Credo Technology Group Holding Ltd. has reported a strong financial performance, with notable developments in its earnings and revenue. The company posted a 25.9% quarter-over-quarter revenue increase, surpassing previous estimates by 6.3%, and reported non-GAAP earnings per share of $0.35, exceeding expectations by $0.08. Credo’s revenue guidance for the upcoming quarter stands at $190 million, indicating an 11.7% growth and surpassing prior estimates by 17.6%. Analysts from Stifel, Needham, TD Cowen, and Mizuho (NYSE:MFG) have responded positively, raising their price targets for the company, with Needham and TD Cowen setting targets at $85.
Credo’s fiscal year 2026 revenue is projected to exceed $800 million, marking an 85% year-over-year increase, driven by advancements in Optical and Active Electrical Cable technologies. The company has also achieved significant customer diversification, with three to four customers expected to account for over 10% of revenue through fiscal year 2026. Credo’s leadership in AI and data center connectivity is highlighted by its recent 800G optical DSP win at a hyperscaler. Analysts from Noble Capital maintain an Outperform rating, citing the company’s compelling valuation and potential for growth.
Furthermore, Credo’s gross margin is projected to remain at the high end of its long-term goal of 63% to 65%, supported by expanding hyperscaler ramps and innovative developments like the PILOT firmware. Overall, analysts express confidence in Credo Technology’s market position and future performance, underscoring its growth potential in the coming years.
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