On March 10, 2025, CRDO, OOMA, and PGR were included in the Zacks Rank #1 (Strong Buy) list of momentum stocks.
Credo Technology announced impressive earnings for the third quarter, surpassing expectations and increasing its revenue forecast for the fourth quarter, thanks to strong shipments of AEC products and a growing number of hyperscaler customers. Although 86% of its Q3 revenue came from Amazon's AWS, the risk is lessened by AWS's investment in Credo and the possibility of diversifying suppliers. With a forward valuation of 37 times FY26 EBITDA, Credo is still seen as undervalued, especially as it enters new markets and maintains a solid financial position.
CRDO's significant drop in value was justified due to the collapse of the AI bubble caused by DeepSeek, a rising tariff conflict, and slowing sales of infrastructure chips. This selloff has created better opportunities for growth, as the company is experiencing strong revenue growth, higher profit margins, and expanding partnerships with major tech firms. The future looks very promising for CRDO in the data center sector, as indicated by recent earnings calls from several hyperscalers, including NVDA and TSM.
Credo Technology's stock is greatly undervalued, with an adjusted PEG ratio of 0.52x, which is much lower than the industry average, even though the company has shown strong growth in revenue and earnings per share (EPS). In the third quarter, Credo reported an impressive revenue increase of 87% compared to the previous quarter and 154% year-over-year, surpassing expectations by 12.17% for revenue and 36.53% for EPS. The company's growth is fueled by a high demand for faster, energy-efficient connectivity and AI infrastructure, and it is also working on diversifying its revenue sources to lessen risks from relying on a few customers.
Credo Technology is facing challenges from competition and economic uncertainties, even though there is an increasing need for AI-driven solutions.
Credo Technology Group Holding Ltd. (CRDO) reported quarterly earnings of $0.25 per share, which is higher than the Zacks Consensus Estimate of $0.18 per share.
I anticipate a great performance for Credo Technology in the third quarter of FY2025, which should help the stock price bounce back from its recent decline. The company's significant growth in AI infrastructure and its solid customer base, including Amazon, Microsoft, and Tesla, back its value and future opportunities. Additionally, Credo's non-GAAP forward PEG ratio is one-third lower than the average in the sector, suggesting strong growth potential.
CRDO's financial results for the third quarter are expected to benefit from the demand for AI. However, concerns about its valuation and competition make it a careful investment choice.
We have just released a list of 10 stocks that have fallen the most due to cautious investors. In this article, we will examine how Credo Technology Group Holding Ltd (NASDAQ:CRDO) compares to other stocks that have also seen significant drops. Wall Street started the week with its first trading day on […]
The introduction of the Chinese AI model DeepSeek caused a loss of almost $1 trillion in the stock market, affecting AI and semiconductor shares. Trade tensions have risen between the U.S. and China due to tariffs on Chinese imports and stricter rules on semiconductor exports from the Trump administration, which has raised concerns for semiconductor stocks linked to China. Despite this, strong growth in the AI industry has led some analysts to stay optimistic about American chip manufacturers.