Analysts Highlight Credo Hyperscaler Partnerships With Amazon, Microsoft, xAI Amid AI Boom

Credo Technology Group CRDO issued its third-quarter earnings report on Tuesday. It reported quarterly earnings of 25 cents per share. It beat the analyst consensus estimate of 18 cents.

Quarterly revenue came in at $135 million (over revenue of $53.05 million a year ago) versus the analyst consensus estimate of $120.06 million.

Credo expects fourth-quarter revenue of $155M million-$165 million, versus the consensus estimate of $137.43 million.

Also Read: Credo Technology Stock Rallies After Better-Than-Expected Q3 Report: Details

Several Wall Street analysts rerated Credo stock:

• Needham analyst Quinn Bolton reiterated Credo with a Buy and a $80 price target.
• Roth MKM analyst Sujeeva De Silva maintained a Buy rating on Credo with a price target of $80.
• Susquehanna analyst Christopher Rolland reiterated Credo with a Neutral and lowered the price target from $80 to $60.

Needham: Credo reported a significant revenue beat (+16% above Bolton’s estimate) and raise (+20% above his estimate) driven by growth at its largest hyperscaler customer, Amazon.Com Inc AMZN, which accounted for 86% of revenue in the third quarter of fiscal 2025, up +388% sequentially.

Management expects Amazon’s revenue to be in the same ballpark in the fourth quarter of fiscal 2025 (Bolton modeled ~$105 million) but sees other customers accounting for ~33% of revenue. As such, different customers will drive the +19% sequentially increase in the fourth quarter of 2025.

Credo reported another strong beat and guided revenue of $27 million (+20%) above Bolton’s estimate, driven by a stronger-than-expected ramp at its largest customer, Amazon.Com Inc AMZN.

Bolton highlighted that Amazon’s ramp is more substantial than anticipated, and he meaningfully raised his Amazon shipment estimates for fiscal 2026 and 2027. Amazon represented 86% of third-quarter revenue.

The company expects its customer base to diversify starting in the fourth quarter and continuing through fiscal 2026, with 3-4 customers likely reaching the 10% threshold.

The company’s PCIe retimer product line was certified by the PCIe SIG and won an ODM AI platform commitment with revenue expected in calendar 2026. The company will demonstrate PCIe AECs for scale-up networks at GTC.

Bolton also noted the management reiterated >50% growth in fiscal 2026 (against Bolton’s +62%), despite the more decisive than anticipated second half of fiscal 2025.

Management expects the business to diversify going forward as 3-4 hyperscaler customers could be above 10% of sales in the fourth quarter of fiscal 2025 and into fiscal 2026.

The company has ramped AECs at three hyperscalers to date (Microsoft Corp MSFT, Amazon, and xAI) and is in qualification with two additional hyperscalers who will likely ramp in fiscal 2026.

Bolton noted the fifth hyperscaler will begin deploying AECs for the first time in fiscal 2026. Management stated one of its hyperscalers, he expects as xAI, is receiving meaningful GPU allocations from Nvidia Corp NVDA, so he expects a strong revenue ramp at xAI in fourth-quarter of fiscal 2025 and fiscal 2026.

Management also stated that it expects its first hyperscaler customer, Microsoft, to ramp back to a $100 million annualized run rate in fiscal 2026.

Roth MKM: Credo reported results ahead of consensus and guided revenue well ahead of consensus, reflecting lead customer cabling program strength as well as the ramp of large customer programs in the coming quarters.

De Silva expects Cedo to benefit from its leadership position here as AI infrastructure continues to ramp and evolve to create additional connectivity content opportunity for the company across an expanding base of hyperscale customers.

Price Action: CRDO stock was down 15.4% at $45.87 at last check Wednesday.

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