Credo Technology stock surged Tuesday after the maker of high-speed connectivity systems for data centers delivered a beat-and-raise earnings report.
The San Jose, Calif.-based company late Monday said it earned an adjusted 35 cents a share on sales of $170 million in its fiscal fourth quarter ended May 3. Analysts had expected earnings of 27 cents a share on sales of $159.6 million. On a year-over-year basis, Credo earnings soared 400% while sales increased 180%.
Credo's sales have accelerated for the last two quarters.
For the current quarter, its fiscal Q1, Credo expects revenue of $185 million to $195 million. The midpoint of $190 million would represent year-over-year growth of 218%. Analysts had been expecting sales of $163 million.
On the stock market today, Credo stock jumped 14.8% to close at 71.92. Earlier in the session, it was up as much as 29.3% to 80.99. Credo stock hit an all-time high of 86.69 on Jan. 22 before China's DeepSeek news hammered artificial intelligence stocks.
"The company's results were fueled by surging demand for our innovative, reliable, and energy-efficient high-performance connectivity solutions," Chief Executive Bill Brennan said in a news release. "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's products include integrated circuits, active electrical cables, and serializer/deserializer (SerDes) chiplets. It also licenses its SerDes intellectual property.
Credo Stock Gets Price-Target Hikes
At least six Wall Street analysts raised their price targets on Credo stock after the company's fiscal Q4 report.
Stifel analyst Tore Svanberg reiterated his buy rating on Credo stock and upped his price target to 80 from 69. He called Credo's beat-and-raise report "impressive," adding that the company is an "AI/data center connectivity leader" with multiple key differentiators.
Susquehanna analyst Christopher Rolland kept his positive rating on Credo and increased his price target to 90 from 60.
Credo continues to deliver "healthy" growth, Rolland said in a report. Its hyperscale cloud computing customers likely include Amazon, Microsoft and xAI, he said. Two additional hyperscalers will come on board as customers in the second half of the current fiscal year, he said.
In a client note, Mizuho Securities trading-desk analyst Jordan Klein said the "Credo story is an embarrassment of riches."
Klein said Credo stock is a screaming buy. "These sorts of companies and stocks just do not come along frequently," he said.
Credo stock is on the IBD Tech Leaders list.
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