Street Calls of the Week
Investing.com - Stifel has raised its price target on Credo Technology Group Holding Ltd (NASDAQ:CRDO) to $160.00 from $155.00 while maintaining a Buy rating following the company’s acquisition of Hyperlume, Inc. The company has demonstrated impressive performance with revenue growth of 175.8% in the last twelve months, according to InvestingPro data.
Credo Technology announced on September 29th, 2025, that it had completed its acquisition of Hyperlume, a developer of MicroLED-based optical interconnect technology for chip-to-chip communication. The acquisition is estimated to have cost approximately $40-50 million, funded through a combination of shares and cash. With an impressive gross profit margin of 66% and a strong financial health score rated as "GREAT" by InvestingPro, the company appears well-positioned to integrate this acquisition.
Hyperlume’s technology utilizes specialized ultra-fast microLEDs and ultra-low power circuitry to address energy and bandwidth limitations in traditional electronic interconnects. Stifel believes Credo will leverage this technology to develop Active LED Cables (ALCs), similar to its existing Active Electric Cables (AECs).
The investment firm expects product development could begin in calendar year 2026, with potential early revenue generation in 2027. Use cases for the technology are anticipated to include row-scale and potentially scale-up applications, with ALCs potentially delivering connections of up to 20-30 meters.
Stifel notes that the acquisition will likely increase Credo’s total addressable market and offers strategic potential as the company expands its product offerings to target both copper solutions through AECs and optical solutions via PAM4 DSPs and ALCs.
In other recent news, Credo Technology Group reported impressive financial results for the July quarter, with revenue reaching $191 million and earnings per share at $0.35, surpassing consensus expectations. The company also provided guidance for the October quarter, projecting revenue of $235 million, which is about 15% higher than the consensus estimate of $202 million. Mizuho responded by raising its price target for Credo to $155, maintaining an Outperform rating due to the strong guidance. Additionally, TD Cowen increased its price target to $160, citing Credo’s robust financial performance and an improved growth outlook for fiscal year 2026, now expected to be 120% year-over-year.
Credo has also completed the acquisition of Hyperlume, a developer of microLED-based optical interconnect technology, to enhance its AI connectivity solutions. The acquisition is intended to boost Credo’s high-speed connectivity offerings to meet growing bandwidth demands. Furthermore, the company unveiled its new Bluebird Digital Signal Processor, designed for 1.6Tbps optical transceivers, which aims to reduce power consumption below 20W. Lastly, William Blair initiated coverage on Credo with an Outperform rating, highlighting the company’s expanding product portfolio and its ventures into optics with the Dove and Lark DSP chips.
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