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Investing.com -- Shares of Credo Technology Group Holding Ltd (NASDAQ:CRDO) soared more than 14% in premarket trading Tuesday after the semiconductor firm delivered a quarterly earnings beat and issued bullish guidance, underscoring its momentum in the AI-driven infrastructure market.
The company reported adjusted earnings per share of $0.35, well above the $0.27 consensus among analysts.
Fourth-quarter revenue surged 179.7% year-over-year to $170 million, topping the average estimate of $159.59 million. The blowout result capped a fiscal year in which sales rose 126% to $436.8 million, with growing demand from hyperscalers fueling top-line growth.
The company sees further momentum ahead, forecasting first-quarter fiscal 2026 revenue between $185 million and $195 million. That topped analyst expectations of $162 million and implies a sequential revenue increase of 12% at the midpoint.
Commenting on the report, Stifel analysts highlighted "another solid beat" from Credo, alongside an "impressively raised outlook."
"Overall, we believe CRDO continues to execute impressively across each of its growth/diversification axes, positioning it very well to retain its industry-leading position in AECs while expanding into adjacent opportunities that can leverage its key differentiators," they said in a note.
Separately, Mizuho (NYSE:MFG) analysts said they "continue to see CRDO benefiting from AI tailwinds for AEC, PCIe, Optical DSP, leveraging its KEY Serdes "N-1" technology moat."
While companies from Nvidia (NASDAQ:NVDA) to Broadcom (NASDAQ:AVGO) have seen booming demand for AI-enabling components, Credo has carved a niche in high-speed connectivity essential for data-intensive AI tasks. “We continue to see growing demand for our solutions across hyperscaler customers to power advanced AI services, a trend we believe will persist for the foreseeable future,” Credo CEO Bill Brennan added.
Credo also posted continued improvement in operational efficiency, with a non-GAAP gross margin of 67.4%, compared to 66.1% a year earlier. The company ended the quarter with $431.3 million in cash and short-term investments, bolstering its position to invest in next-generation product lines.
(Luke Juricic contributed to this report.)