Credo Technology Group (NASDAQ:CRDO) Stock Falls 7.3% – What’s Next?

Shares of Credo Technology Group Holding Ltd. (NASDAQ:CRDO) dropped 7.3% on Monday. The company traded as low as $200.24 and last traded at $200.84. Approximately 8,130,315 shares changed hands during trading, an increase of 8% from the average session volume of 7,540,689 shares. The stock had previously closed at $216.55.

Key Stories Impacting Credo Technology Group

Here are the key news stories impacting Credo Technology Group this week:

• Positive Sentiment: Credo’s AI connectivity demand remains robust. Recent quarterly revenue increased 114.7% year over year to $479 million, while EPS exceeded analyst expectations. Analysts cited in recent coverage expect fiscal 2027 revenue to rise more than 85%, supported by record sales and expansion of the optical business. Does Credo’s Revenue Outlook Signal Further Upside?
• Positive Sentiment: The company unveiled its 1.6T ZeroFlap Active Light Cable, designed for AI data centers with lower power consumption, longer reach and improved reliability. Commercial shipments are expected around 2027, creating a potential new growth driver as data-center bandwidth requirements increase. Credo Expands AI Connectivity Portfolio
• Positive Sentiment: Credo is leading an Open Compute Project workstream to standardize Short-Reach Micro-Emitter Optics, potentially positioning its technology for broader hyperscaler adoption. Its collaboration with AMD on memory connectivity also expands the company’s opportunity beyond active electrical cables. Credo Launches SRMO Standardization
• Neutral Sentiment: Some analysts view CRDO as undervalued relative to its growth and peers, with a consensus “Moderate Buy” rating. However, the company still trades at a high earnings multiple and relies heavily on two customers. Investors must also wait for newer optical products to ship at scale before they can materially affect results.
• Negative Sentiment: The recent decline appears largely linked to sector-wide weakness and profit-taking in AI infrastructure stocks rather than a newly reported operational problem. High volatility and valuation sensitivity remain risks if customer capital spending slows. Does the Drop in Credo Stock Change Anything?
• Negative Sentiment: CFO Daniel Fleming sold 7,580 shares under a pre-arranged Rule 10b5-1 plan. The sale reduced his holdings by only 1.52% and left him with a substantial stake, limiting its significance, but it may add modest pressure to sentiment.

Analyst Upgrades and Downgrades

Several research analysts have commented on the company. Stifel Nicolaus cut their target price on Credo Technology Group from $350.00 to $310.00 and set a “buy” rating on the stock in a report on Monday, October 5th. Zacks Research lowered Credo Technology Group from a “strong-buy” rating to a “hold” rating in a report on Monday, August 3rd. Mizuho dropped their price target on shares of Credo Technology Group from $290.00 to $245.00 and set an “outperform” rating on the stock in a research report on Monday, September 21st. Susquehanna lifted their target price on shares of Credo Technology Group from $235.00 to $250.00 and gave the stock a “positive” rating in a research report on Tuesday, July 21st. Finally, Evercore set a $292.00 target price on shares of Credo Technology Group in a research report on Wednesday, September 2nd. One investment analyst has rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $262.67.

Credo Technology Group Trading Down 9.5%

The stock has a market capitalization of $33.72 billion, a P/E ratio of 64.04, a price-to-earnings-growth ratio of 0.80 and a beta of 3.25. The stock’s fifty day moving average price is $207.99 and its two-hundred day moving average price is $203.90.

Credo Technology Group (NASDAQ:CRDO) last announced its quarterly earnings results on Tuesday, September 1st. The company reported $1.20 EPS for the quarter, topping analysts’ consensus estimates of $1.17 by $0.03. The business had revenue of $479.00 million for the quarter, compared to analysts’ expectations of $473.30 million. Credo Technology Group had a return on equity of 28.77% and a net margin of 33.83%. The business’s quarterly revenue was up 114.7% on a year-over-year basis. During the same period in the previous year, the firm earned $0.52 EPS. As a group, analysts expect that Credo Technology Group Holding Ltd. will post 5.02 earnings per share for the current fiscal year.

Insider Activity at Credo Technology Group

In other Credo Technology Group news, CTO Chi Cheng sold 27,500 shares of the firm’s stock in a transaction dated Wednesday, September 23rd. The stock was sold at an average price of $193.12, for a total transaction of $5,310,800.00. Following the sale, the chief technology officer directly owned 5,689,897 shares of the company’s stock, valued at $1,098,832,908.64. This trade represents a 0.48% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Yat Lam sold 55,441 shares of the stock in a transaction that occurred on Friday, July 31st. The shares were sold at an average price of $213.02, for a total value of $11,810,041.82. Following the transaction, the chief operating officer owned 2,529,169 shares of the company’s stock, valued at $538,763,580.38. This represents a 2.15% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 435,956 shares of company stock worth $88,625,986 in the last ninety days. Insiders own 9.06% of the company’s stock.

Hedge Funds Weigh In On Credo Technology Group

Several hedge funds have recently modified their holdings of CRDO. GAMMA Investing LLC lifted its stake in shares of Credo Technology Group by 2.6% during the 3rd quarter. GAMMA Investing LLC now owns 1,986 shares of the company’s stock worth $387,000 after buying an additional 51 shares during the last quarter. City Center Advisors LLC boosted its stake in Credo Technology Group by 2.1% in the 2nd quarter. City Center Advisors LLC now owns 2,595 shares of the company’s stock valued at $706,000 after purchasing an additional 53 shares during the period. Versant Capital Management Inc grew its holdings in Credo Technology Group by 8.0% in the 2nd quarter. Versant Capital Management Inc now owns 755 shares of the company’s stock valued at $205,000 after buying an additional 56 shares in the last quarter. QRG Capital Management Inc. increased its position in Credo Technology Group by 1.7% during the 1st quarter. QRG Capital Management Inc. now owns 5,402 shares of the company’s stock worth $507,000 after buying an additional 91 shares during the period. Finally, Krilogy Financial LLC boosted its position in shares of Credo Technology Group by 8.7% in the third quarter. Krilogy Financial LLC now owns 1,136 shares of the company’s stock valued at $228,000 after acquiring an additional 91 shares during the period. Institutional investors and hedge funds own 80.46% of the company’s stock.

About Credo Technology Group

Credo Technology Group Holding Ltd. develops high-speed connectivity solutions for data infrastructure. Its technologies are designed to improve the performance, power efficiency and reliability of connections used in cloud computing, artificial intelligence, high-performance computing, telecommunications and enterprise networks.

The company’s product portfolio includes serializer/deserializer (SerDes) intellectual property, integrated circuits, active electrical cables and optical connectivity products.