Credo Technology Group (CRDO) stock surged 14.8% on Tuesday after the company beat earnings expectations and issued bullish guidance, thanks largely to growing demand from hyperscalers.
For the fiscal fourth quarter ended May 3, Credo posted earnings of 35 cents per share on revenue of $170 million, blowing away Wall Street estimates of 27 cents on $159.6 million in sales.
The strong results capped a breakout year. Full-year revenue reached a record $436.8 million, up 126% from the prior year, with product revenue alone growing 303.3% year-over-year to $164.5 million in Q4.
Credo ended the quarter with $431.3 million in cash, cash equivalents, and short-term investments.
Moving forward, management expects more growth. Credo guided for Q1 revenue between $185 million and $195 million, with the midpoint — $190 million — representing 218% growth from the same period last year.
That’s well ahead of the $163 million analysts were expecting.
For fiscal 2026, the company projects revenue will surpass $800 million, an increase of more than 85% year-over-year.
Credo CEO Bill Brennan credited the company’s strength to “surging demand for our innovative, reliable, and energy-efficient high-performance connectivity solutions.”
“We continue to see growing demand for our solutions across hyperscaler customers to power advanced AI services,” Brennan said. “It’s a trend we believe will persist for the foreseeable future.”
Shares of Credo are now up 7% year-to-date.
Hyperscaler demand fuels growth
Credo makes integrated circuits, serializer/deserializer (SerDes) chiplets, active electrical cables, and also licenses SerDes IP, though licensing revenue fell 75% to $4.2 million in the quarter.
During the call, CFO Dan Fleming said three hyperscalers now account for more than 10% of total revenue. Amazon Web Services alone represents a massive 61%. Another customer contributes 12%, and a third accounts for 11%.
Fleming said two more hyperscaler customers are expected to come online in the second half of the year. In total, Credo expects three to four customers to contribute at least 10% of revenue by the end of fiscal 2026.
Following the report, at least six Wall Street analysts raised their price targets on Credo.
Brennan also addressed potential supply chain disruption from tariffs, saying the company has flexibility to pivot if needed.
“Within months we could be out of one geographic location and into another,” he said. “We’re trying to take a mindset that’s dynamic... and we’re going to try to be flexible to deliver solutions in the most efficient way possible.”
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