Credo Technology Group (NASDAQ:CRDO) Stock Falls 9.5% – Here’s Why

Credo Technology Group Holding Ltd. (NASDAQ:CRDO) shares fell 9.5% during trading on Wednesday. The company traded as low as $130.26 and last traded at $136.50. 10,658,555 shares traded hands during trading, an increase of 40% from the average daily volume of 7,634,610 shares. The stock had previously closed at $150.91.

Key Headlines Impacting Credo Technology Group

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

• Positive Sentiment: A Seeking Alpha contributor upgraded Credo, arguing that the recent sell-off has gone far enough—potentially signaling that the lower share price has improved the risk-reward profile. Credo: The Sell-Off Has Done Its Job (Rating Upgrade)
• Positive Sentiment: Credo and Oracle secured Open Compute Project approval for two optical telemetry standards, supporting Credo’s role in developing connectivity and reliability for next-generation AI data centers. Credo and Oracle Drive AI Optical Innovation
• Neutral Sentiment: Coverage notes that Credo and other AI-hardware companies have delivered strong results, but cautions that supply bottlenecks and customer concentration could limit further gains. The AI Boom Is Creating a New Set of Winners
• Negative Sentiment: A broader tech-sector decline drove a steep drop in CRDO, as investors reassessed AI-related stocks. Separate coverage tied the sell-off to fears that political changes could pose a downside risk to AI spending; that concern, however, has not appeared in Credo’s guidance or analyst estimates. Tech selloff sends Credo Technology down Credo Sinks as Political Fears Weigh on AI Stocks

Analyst Upgrades and Downgrades

A number of research firms recently weighed in on CRDO. Susquehanna upped their price target on Credo Technology Group from $235.00 to $250.00 and gave the stock a “positive” rating in a research note on Tuesday, July 21st. Rosenblatt Securities restated a “neutral” rating and issued a $235.00 target price on shares of Credo Technology Group in a research note on Thursday, October 15th. Bank of America lowered their price objective on shares of Credo Technology Group from $340.00 to $275.00 and set a “buy” rating on the stock in a research report on Wednesday, September 2nd. TD Cowen boosted their price objective on Credo Technology Group from $260.00 to $300.00 and gave the company a “buy” rating in a research note on Tuesday, August 18th. Finally, Stifel Nicolaus cut their target price on Credo Technology Group from $350.00 to $310.00 and set a “buy” rating for the company in a research note on Monday, October 5th. One research analyst has rated the stock with a Strong Buy rating, fourteen have issued a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus target price of $262.67.

Credo Technology Group Price Performance

The stock has a market capitalization of $22.65 billion, a PE ratio of 42.89, a P/E/G ratio of 0.54 and a beta of 3.29. The firm’s 50 day simple moving average is $181.07 and its 200 day simple moving average is $180.45.

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

Insiders Place Their Bets

In other Credo Technology Group news, insider James Laufman sold 5,000 shares of the firm’s stock in a transaction that occurred on Thursday, October 1st. The shares were sold at an average price of $205.00, for a total transaction of $1,025,000.00. Following the completion of the transaction, the insider owned 164,223 shares of the company’s stock, valued at approximately $33,665,715. This trade represents a 2.95% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CEO William Brennan sold 16,666 shares of Credo Technology Group stock in a transaction that occurred on Monday, October 19th. The shares were sold at an average price of $174.87, for a total transaction of $2,914,383.42. Following the transaction, the chief executive officer owned 1,584,164 shares of the company’s stock, valued at $277,022,758.68. The trade was a 1.04% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 352,538 shares of company stock valued at $67,200,077. Insiders own 9.06% of the company’s stock.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of CRDO. Bank of America Corp DE grew its holdings in shares of Credo Technology Group by 13.7% in the second quarter. Bank of America Corp DE now owns 2,182,764 shares of the company’s stock worth $593,603,000 after purchasing an additional 262,479 shares during the last quarter. Atreides Management LP lifted its holdings in Credo Technology Group by 3.5% during the 2nd quarter. Atreides Management LP now owns 1,129,285 shares of the company’s stock valued at $307,109,000 after buying an additional 38,052 shares in the last quarter. The Manufacturers Life Insurance Company lifted its holdings in Credo Technology Group by 192.1% during the 1st quarter. The Manufacturers Life Insurance Company now owns 1,047,084 shares of the company’s stock valued at $98,290,000 after buying an additional 688,596 shares in the last quarter. H&H International Investment LLC boosted its position in Credo Technology Group by 431.6% in the 1st quarter. H&H International Investment LLC now owns 751,200 shares of the company’s stock valued at $70,515,000 after buying an additional 609,900 shares during the period. Finally, Pictet Asset Management Holding SA boosted its position in Credo Technology Group by 222.5% in the 3rd quarter. Pictet Asset Management Holding SA now owns 740,487 shares of the company’s stock valued at $144,170,000 after buying an additional 510,905 shares during the period. 80.46% of the stock is owned by hedge funds and other institutional investors.

Credo Technology Group Company Profile

Credo Technology Group designs and supplies high-speed connectivity solutions for data infrastructure, including data centers and networking systems. Its products help move data between processors, servers, switches and other equipment used in demanding, high-bandwidth environments.

The company’s offerings include active electrical cables, semiconductor and optical digital signal processing products, retimers, and other connectivity components. These solutions are used in applications such as cloud computing and artificial intelligence infrastructure.

Credo is headquartered in San Jose, California, and serves customers in the global data infrastructure market.