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Investing.com -- Credo Technology Group Holding Ltd (NASDAQ:CRDO) shares surged 7.7% after the connectivity solutions provider reported first-quarter fiscal 2026 results that significantly exceeded analyst expectations, driven by strong demand from hyperscale customers.
The company posted adjusted earnings per share of $0.52 for the quarter ended August 2, 2025, handily beating the analyst estimate of $0.35. Revenue soared to $223.1 million, well above the consensus estimate of $190.63 million and representing a remarkable 274% increase YoY and 31% growth quarter-over-quarter.
"During the first quarter of fiscal 2026, Credo continued a strong growth trajectory," said Bill Brennan, Credo’s President and Chief Executive Officer. "The Company’s growth has been driven by deep, strategic partnerships with hyperscalers and key customers."
Credo’s performance was highlighted by robust gross margins, with non-GAAP gross margin reaching 67.6% for the quarter. The company reported non-GAAP net income of $98.3 million, compared to just $7 million in the same quarter last year.
Looking ahead, Credo provided an optimistic outlook for the second quarter, projecting revenue between $230 million and $240 million, significantly higher than the analyst consensus of $199 million. The midpoint of this guidance represents approximately 5% sequential growth.
The company maintained a strong financial position with $479.6 million in cash and short-term investments at the end of the quarter, positioning it well for continued expansion in the high-speed connectivity market for AI applications, cloud computing, and hyperscale networks.
Credo’s non-GAAP operating income margin improved dramatically to 43.1% from just 3.7% in the year-ago quarter, demonstrating the company’s ability to scale efficiently while meeting growing demand for its connectivity solutions.