Credo Technology Group Holding Ltd (NASDAQ:CRDO) saw its shares rally more than 14% in Tuesday’s premarket trading after the semiconductor company reported robust fourth-quarter earnings and issued a significantly higher-than-expected revenue forecast, fueled by booming demand in AI infrastructure.

For the fiscal fourth quarter, Credo posted adjusted earnings of $0.35 per share, beating analyst projections of $0.27. Revenue surged 179.7% year-over-year to $170 million, exceeding Wall Street’s average estimate of $159.6 million.

The quarter capped a stellar year for Credo, with annual sales climbing 126% to $436.8 million. The company credited much of this growth to heightened demand from hyperscale clients supporting AI workloads.

Looking ahead, Credo projected revenue between $185 million and $195 million for the first quarter of fiscal 2026—well above the $162 million analysts had expected. At the midpoint, that guidance represents a 12% sequential increase.

Analysts responded positively to the results. Stifel noted “another strong performance” and praised the company’s upgraded guidance, saying Credo remains well-positioned across its various growth initiatives, particularly in Active Electrical Cables (AECs). “CRDO continues to stand out in its core market and is effectively expanding into adjacent segments that benefit from its unique capabilities,” the firm commented.

Mizuho analysts also pointed to the company’s technological edge, noting it is well-placed to benefit from the AI-driven demand for high-speed connectivity components. They cited Credo’s leadership in PCIe, Optical DSP, and its proprietary “N-1” SerDes technology as key differentiators.

While tech giants like Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) are reaping the benefits of AI hardware demand, Credo has established itself in the vital connectivity space that powers high-performance AI operations. CEO Bill Brennan noted, “Demand for our solutions continues to grow across hyperscalers as they scale AI services, and we see this trend gaining further traction.”

Operationally, the company showed improvements as well. Gross margins on a non-GAAP basis rose to 67.4% from 66.1% a year ago. Credo ended the quarter with $431.3 million in cash and short-term investments, giving it ample resources to invest in next-gen technologies.

Credo Technology Group Holding stock price

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