Credo Technology Group on Tuesday won an upgrade to a buy rating from a TD Cowen analyst, who cited an expected jump in revenue. Credo stock has advanced 40% in 2024 amid rising expectations.
"With the model likely to inflect beginning the second half of fiscal 2025 — January quarter, we come off the sidelines," TD Cowen analyst Matthew Ramsay said in a report. "We upgrade to buy as revenue accelerates and broadens across programs and products."
On the stock market today, Credo popped more than 6% to 28.97.
In addition, Ramsay hiked his price target on CRDO stock to 35 from 24.
Computer servers in data centers equipped with artificial intelligence chips need connections to network infrastructure. Credo's products speed up communications among racks of computer servers and storage devices packed into data centers.
Among its products are active electrical cables. AECs connect computer servers to networking equipment such as switches or routers. Further, Credo makes both AEC chips and cabling.
Revenue Jump On The Way?
Credo's biggest customer for AECs has been Microsoft.
In fiscal 2024, which ended in April, Credo's revenue rose a modest 5% to $193 million. Meanwhile, analysts predict fiscal 2025 revenue of $312.9 million, up 62%. In fiscal 2026, analysts project 47% revenue growth to $461.3 million.
Analysts expect Amazon.com to join Microsoft as a top customer for AECs. They view other "hyperscale" cloud companies as likely buyers of AEC gear.
In the AEC chip market, rivals include Marvell Technologies, Broadcom and Astera Labs.
Credo Stock: Technical Ratings
Meanwhile, the Relative Strength Rating of Credo stock is 96 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS rating of 80 or better.
Further, Credo stock owns an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
The rating, on a scale of A+ to E, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
