Credo Technology Group Shares Are On The Rise Today: What's Going On?

Credo Technology Group Holding Ltd CRDO shares are trading higher Tuesday following the announcement of its second-quarter fiscal 2025 financial results, which significantly exceeded expectations. Here’s what you need to know.

What To Know: On Monday, Credo reported revenue of $72.0 million, a 21% increase sequentially and a 64% year-over-year rise, exceeding the consensus estimate of $66.789 million. Credo's adjusted earnings per share came in at 7 cents, outperforming the consensus estimate of 5 cents by 40%.

The company achieved a GAAP gross margin of 63.2% and a non-GAAP gross margin of 63.6%. Credo also reported $383.0 million in cash and short-term investments.

Looking ahead, Credo issued its outlook projecting revenues between $115 million and $125 million, higher than analysts’ prior expectations of $86.042 million. The company anticipates non-GAAP gross margins to remain at 61.0% to 63.0%, alongside controlled operating expenses between $42.0 million and $44.0 million.

Credo's CEO, Bill Brennan, attributed the company's success to its strategic positioning within the rapidly growing AI and data infrastructure markets. The CEO noted that the second quarter marked a turning point for Credo, with demand for its products surpassing projections. This growth is driven by accelerating AI deployments and strengthening customer relationships.

Analyst Updates: B of A Securities raised its price target from $27 to $80 and upgraded the stock to a "Buy" rating. Barclays followed suit, raising its price target to $80, while Needham increased its price target from $43 to $70.

CRDO Price Action: Credo shares were up 46.8% at $70.17 at the time of writing, according to Benzinga Pro.

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Image via Credosemi.