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The company announced a significant achievement with an 800G optical DSP win at a hyperscaler, and it projects that revenue from its optical division will double in FY26. Credo Technology’s guidance for FY26 revenue is set to exceed $800 million, marking an increase of over 85% year-over-year and surpassing previous estimates by more than $100 million.Additionally, Credo Technology’s management has indicated that in the intermediate term, the company’s gross margin is expected to be at the high end of its long-term goal of 63% to 65%, building on its current impressive gross margin of 64.77%. Needham’s updated price target is based on a valuation of 17 times the increased calendar year 2026 sales estimate of $911 million. For deeper insights into Credo Technology’s valuation and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro.
Credo Technology has resumed customer diversification following a previous quarter where customer concentration was noted. In the fourth fiscal quarter, three customers accounted for more than 10% each, and management anticipates maintaining this trend with 3-4 customers exceeding 10% through fiscal year 2026. The company is also expanding its reach with two additional hyperscalers expected to ramp up in mid and late FY26. InvestingPro data shows impressive revenue growth of 126.34% in the last twelve months, with analysts anticipating continued strong sales growth this year. Get access to 20+ additional ProTips and comprehensive analysis with an InvestingPro subscription.
The company announced a significant achievement with an 800G optical DSP win at a hyperscaler, and it projects that revenue from its optical division will double in FY26. Credo Technology’s guidance for FY26 revenue is set to exceed $800 million, marking an increase of over 85% year-over-year and surpassing previous estimates by more than $100 million.
Additionally, Credo Technology’s management has indicated that in the intermediate term, the company’s gross margin is expected to be at the high end of its long-term goal of 63% to 65%. Needham’s updated price target is based on a valuation of 17 times the increased calendar year 2026 sales estimate of $911 million.
In other recent news, Credo Technology Group Holding (NASDAQ:CRDO) Ltd. reported strong financial results for the April quarter, with revenues reaching $170 million and earnings per share of $0.35, both surpassing consensus estimates. The company has provided guidance for the July quarter, projecting a 12% increase in revenues to $190 million, well above the market’s expectations of $163 million. Analysts from Mizuho (NYSE:MFG) and Stifel have responded positively to these developments, raising their price targets for the company to $81 and $80, respectively, while maintaining an Outperform and Buy rating. Credo Technology’s strategic execution and advancements in Optical and Active Electrical Cable technologies have been highlighted as key contributors to its growth prospects.
Furthermore, Credo Technology recently announced significant changes to its board of directors, with William J. Brennan being appointed as the new chairman. This reshuffle includes the election of Fariba Danesh as a new director, bringing over three decades of experience in the technology sector. In addition to these developments, Stifel analysts have maintained a Buy rating for Credo Technology, citing confidence in the company’s business model and the potential for revenue growth driven by AI-driven deployments. The analysts have projected a compound annual growth rate of 95% from 2023 to 2025, reflecting optimism about the company’s future prospects. These recent developments indicate Credo Technology’s ongoing efforts to strengthen its market position and capitalize on emerging opportunities in the semiconductor industry.
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