Overview
- Credo reported fiscal Q3 revenue of $407 million, up 52% from the prior quarter and 202% year over year, as three hyperscalers each made up more than 10% of sales and a fifth hyperscaler came on board.
- Active electrical cables, which carry short links inside AI server rows, are displacing optics up to 7 meters because Credo says they use about half the power and are far more reliable, driving roughly 3x year-over-year AEC revenue growth.
- ZeroFlap Optics is set to extend Credo beyond copper into in‑data‑center optical links, with management citing higher reliability, lower power, rising purchase commitments, and an accelerated production ramp, and some analysts expecting material contribution by FY27.
- Most analysts rate the stock a Buy with a consensus target near $200, even after Susquehanna and Bank of America trimmed targets in March while keeping positive ratings and raising longer‑term earnings estimates following Q3 results.
- Valuation has shifted from a premium to roughly a 36% discount on next year’s earnings versus peers, though the business remains sensitive to large customers, with the top three accounting for 39%, 32% and 17% of Q3 revenue.