Is Credo Technology stock a buy?

Roth Capital Markets analyst Suji Desilva raised his price target on San Jose–based Credo Technology Group (Credo Technology Group Stock Quote, Chart, News, Analysts, Financials NASDAQ:CRDO) to US$250.00 from US$170.00 on Dec. 2, maintaining a “Buy” rating after the company delivered another substantial beat-and-raise quarter driven by accelerating AI-related hyperscale demand.

Desilva said fiscal Q2 2026 revenue of US$268-million rose 20% sequentially and 272% year-over-year, far ahead of consensus at US$190.6-million. Growth was led by active electrical cables and other product revenue, which reached US$261-million, while IP licensing contributed US$6.7-million. Gross margin held steady at 67.7% and earnings per share of US$0.67 came in US$0.18 above expectations.

He said the results reflect “diversifying AEC program ramps across a broadening set of large hyperscale customers,” adding that Credo’s expanding portfolio, zero-flap optics, micro-LED active cables, Omniconnect gearboxes and PCIe retimers, supports ongoing growth “across cloud and AI infrastructure.”

With roughly US$815-million in cash, he noted the company remains well-funded to execute.

Credo guided fiscal Q3 revenue of US$335-million to US$345-million, implying 25%–30% sequential growth and well above the Street at US$247-million. Management also projected fiscal 2026 revenue growth of roughly 170% year-over-year, an acceleration from the ~125% increase expected for fiscal 2025. A new hyperscale customer accounting for 10% of quarterly sales contributed to the expanding base, with the top four customers representing more than 90% of revenue.

Desilva said the revised US$250 target reflects a CY2026 EV/Sales multiple of ~35×, a premium to communications-infrastructure peers at ~10×, which he argues is warranted by Credo’s “significant long-term growth opportunity” in cloud and AI buildouts.

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