CRDO Stock Forecast & Price Target

Credo Technology Group Holding Ltd demonstrates a robust financial position, concluding the second quarter of 2026 with $814 million in cash and equivalents, reflecting a substantial sequential increase of $340 million, primarily from an ATM offering. Notably, the company has experienced explosive revenue growth, with product revenue soaring 306% year-over-year and gross margins improving to a remarkable 67.7%, significantly surpassing consensus expectations. Additionally, Credo's operating margins have reached 46.3%, driven by strong top-line performance and operational efficiency, which positions the company favorably within the expanding data infrastructure market.

Credo Technology Group is facing a declining revenue growth trajectory, with projections indicating a drop from approximately 120% year-over-year growth in the fourth quarter of FY26 to just 27% by the fourth quarter of FY27. The company's gross margin is also expected to contract, estimating a decrease of 270 basis points at the midpoint to a range of 64% to 66%. Additionally, a reliance on major customers, such as Amazon, which represented 24% of sales and experienced a decline from previous quarters, along with increasing competition from established players in the industry, raises concerns about potential volatility in revenue and overall financial stability.