CRDO

IMPORTANT DISCLOSURE & DISCLAIMER
This article is for informational and educational purposes only. It does NOT constitute investment advice, a recommendation to buy or sell any security, or a solicitation of any kind. Investing in stocks, especially growth-oriented technology and semiconductor companies, involves substantial risk of loss and is not suitable for everyone. Past performance is not indicative of future results. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Credo Technology (CRDO) Just Dropped a Revenue Bomb — Is This the AI Connectivity Stock to Own in 2026?

February 11, 2026

AI infrastructure keeps accelerating — and one under-the-radar name just proved it with numbers that shocked Wall Street.

On February 9, 2026, Credo Technology Group Holding Ltd. (NASDAQ: CRDO) did something rare in today’s choppy semiconductor market: it pre-announced blowout preliminary results for its fiscal Q3 2026 (ended January 31, 2026) — and the market loved it.

Shares gapped up sharply, closing the day up ~9–11% at around $134–135 (with intraday highs near $142 on massive volume). After-hours and the following session pushed it even higher in some reports.

So what exactly happened, and does this make CRDO a buy right now?

The Headline Numbers That Changed Everything

Credo now expects Q3 FY2026 revenue of $404 million – $408 million. That’s:

• Well above its own prior guidance range of $335M – $345M
• Roughly 17–19% above recent Wall Street consensus (~$341–346M)
• Implies a continuation of triple-digit year-over-year growth

Even more striking: management updated its outlook and now projects more than 200% year-over-year revenue growth for the full fiscal year 2026 (ending ~April/May 2026). They also guided to mid-single-digit sequential growth into Q4 and heading toward fiscal 2027 — with several analysts now modeling FY2027 revenue approaching $2 billion.

For context: Credo has gone from hundreds of millions in annual revenue just a couple of years ago to potentially >$1.3 billion this fiscal year. That’s explosive, even by AI-semiconductor standards.

Why the Massive Beat? It’s All About AI Data Centers

Credo’s core products — high-speed active electrical cables (AECs), retimers, SerDes IP, and emerging PCIe retimers (like the recently PCI-SIG compliant Toucan) — sit right in the sweet spot of next-gen AI clusters.

Key tailwinds driving the surge:

• Hyperscalers are ramping massive GPU clusters that need ultra-low-latency, power-efficient connectivity at 800G/1.6T speeds
• AECs (copper-based) continue to win share vs. traditional optical solutions in many rack-to-rack connections
• New design wins and ASP uplift from higher-speed products
• Expanding product portfolio: 224G retimers, Blue Heron platform, Toucan PCIe, etc.

In short: the AI training/inference buildout isn’t slowing — it’s accelerating, and Credo is capturing more of the connectivity TAM than almost anyone expected.

What Wall Street Is Saying Right Now

Consensus remains Strong Buy across most covering analysts.

Recent updates post-pre-announcement include reiterations/raises with targets generally ranging from ~$170 to $260, with many clustered around $208–224 — implying ~55–70% upside from ~$135 levels.

Valuation is undeniably rich (forward P/S in the high teens to low 20s), but the growth trajectory keeps most analysts comfortable with the multiple.

Risks to Keep in Mind

• Heavy customer concentration (a few large hyperscalers)
• Semiconductor cyclicality — any pause in AI capex would hurt
• High valuation — digestion periods are common after big runs
• Full Q3 earnings (with margins & detailed guidance) scheduled for March 2, 2026

Bottom Line: Momentum Is Clearly Back

The pre-announcement wasn’t just a beat — it was a statement. If you believe the AI infrastructure buildout has multiple more years of strong growth ahead, CRDO looks like one of the more compelling growth names in semis right now.

Of course, this is not personalized investment advice. Markets move fast, valuations are stretched, and semiconductors are volatile. Do your own research, size positions carefully, and consider waiting for the full Q3 print if you want more color.

What do you think — is CRDO the next big AI connectivity winner, or has the easy money already been made?

Happy investing — and stay tuned for the March 2 earnings call. 🚀

Final Disclaimer
The author may hold positions in CRDO or related securities at the time of publication (or may buy/sell without notice). No compensation was received for writing this article. All opinions expressed are solely those of the author and do not reflect the views of any employer, affiliate, or financial institution. Investing involves risk, including possible loss of principal. Readers should never invest based solely on information found in blog posts, social media, or similar sources.