Core Insights - Credo Technology Group Holding Ltd (CRDO) is positioned as a strong player in high-speed connectivity, driven by the increasing demand for data infrastructure and AI workloads [1] Financial Performance - For Q4 fiscal 2025, CRDO reported a non-GAAP operating margin of 36.8%, an increase of 538 basis points from the previous quarter [2][9] - The non-GAAP net margin reached 38.4%, exceeding the long-term target range of 28% to 33% [2] - Fiscal 2025 saw an operating margin expansion of 2,500 basis points, attributed to robust revenue growth and effective cost control [2] Revenue Growth - Revenues nearly tripled from Q1 to Q4 of fiscal 2025, driven by a shift towards efficient connectivity solutions [3] - Significant growth was noted in Active Electrical Cables (AECs), optical products, and retimers, with a notable win in the optical segment for an 800G transceiver [3] Future Outlook - For fiscal 2026, CRDO anticipates revenues to exceed $800 million, indicating over 85% year-over-year growth [4] - Non-GAAP operating expenses are expected to rise at less than half the rate of revenues, potentially driving the non-GAAP net margin to nearly 40% [4] Q1 Fiscal 2026 Projections - For Q1 fiscal 2026, CRDO expects revenues between $185 million and $195 million, suggesting a 12% sequential increase [5] - Non-GAAP gross margin is projected to be between 64% and 66%, with operating expenses forecasted between $54 million and $56 million [5] Competitive Landscape - CRDO faces competition from semiconductor giants like Broadcom Inc. and Marvell Technology, which may impact its growth trajectory [6] Market Performance - CRDO shares have increased by 197.8% over the past year, significantly outperforming the Electronics-Semiconductors industry's growth of 18.5% [11] - The company is currently trading at a price/book ratio of 24.54, higher than the sector's average of 9.91 [12] Earnings Estimates - The Zacks Consensus Estimate for CRDO's earnings for fiscal 2026 has been revised upward in the past 60 days [13]

Core Insights - Wall Street continues its upward trend, primarily driven by the technology sector's adoption of generative AI, despite some challenges in early 2025 [2] - Three technology companies have seen significant earnings estimate revisions, indicating positive market expectations [3] Company Summaries Dell Technologies Inc. (DELL) - DELL has experienced strong demand for AI servers, securing $12.1 billion in AI server orders, which has created a robust backlog [5][9] - The company is expanding its cloud services and AI infrastructure through its APEX platform, which offers multi-cloud solutions [7] - DELL's expected revenue and earnings growth rates for the current year are 8.7% and 16%, respectively, with a recent 0.1% improvement in earnings estimates [8] Jabil Inc. (JBL) - JBL benefits from momentum in capital equipment and AI-powered data center infrastructure, with an 8.4% increase in next-year EPS estimates [9][12] - The company maintains high free cash flow, indicating efficient financial management and operational efficiency [11] - Expected revenue and earnings growth rates for JBL are 5.8% and 17.8%, respectively, for the next fiscal year [12] Credo Technology Group Holding Ltd. (CRDO) - CRDO specializes in high-performance serial connectivity solutions, with its Active Electrical Cables (AEC) gaining traction in the data center market [14] - The company has seen a 37% increase in earnings estimates over the last 60 days, with expected revenue and earnings growth rates of 85.8% and over 100% for the current year [19] - CRDO's product lines, including PCIe retimers and Ethernet retimers, are experiencing robust demand, particularly in AI server applications [17][18]

Back in mid April, I initiated Credo Technology Group Holding Ltd (NASDAQ: CRDO ) at a buy rating as I believed that a bullish reversal was imminent. That call worked out quite nicely as the stock has surged aroundPlease consider following my new X/Twitter account for reaction to market developments and news.I'm a full-time investor with a strong focus on the tech sector. I graduated with a Bachelor of Commerce Degree with Distinction, major in Finance. I'm also a proud lifetime member of the Beta Gamma Sig ...

Group 1 - Credo Technology Group Holding Ltd. (CRDO) is a notable stock in the Computer and Technology sector, which consists of 607 individual stocks and holds a Zacks Sector Rank of 5 [2] - The Zacks Rank system indicates that CRDO currently has a Zacks Rank of 1 (Strong Buy), suggesting a favorable outlook for the stock [3] - Over the past three months, the Zacks Consensus Estimate for CRDO's full-year earnings has increased by 43.3%, indicating improved analyst sentiment and earnings outlook [4] Group 2 - CRDO has achieved a year-to-date return of approximately 45.2%, significantly outperforming the average gain of 8.1% in the Computer and Technology group [4] - In comparison, IBM, another stock in the sector, has a year-to-date return of 32% and a Zacks Rank of 2 (Buy) [5] - CRDO belongs to the Electronics - Semiconductors industry, which includes 44 stocks and is currently ranked 82 in the Zacks Industry Rank, with an average gain of 15% this year [6] Group 3 - The Computer - Integrated Systems industry, where IBM is categorized, has 11 stocks and is ranked 32, with a year-to-date increase of 26.1% [7] - Both CRDO and IBM are highlighted as stocks to watch in the Computer and Technology sector due to their strong performance [7]

Core Insights - Credo Technology Group Holding Ltd (CRDO) has experienced a significant stock appreciation of 144.2% over the past three months, driven by AI proliferation and demand for energy-efficient connectivity solutions, with shares trading near a 52-week high of $95.71 [1][10] - The company is expected to continue its growth trajectory, projecting revenues to surpass $800 million in fiscal 2026, indicating over 85% year-over-year growth [12][10] Group 1: Business Performance - CRDO's Active Electrical Cables (AEC) product line has shown double-digit sequential growth in fiscal Q4 2025, gaining traction in the data center market [3] - The AECs offer over 100 times improved reliability compared to laser-based optical solutions, making them increasingly attractive for data center applications [4] - The optical business, particularly Optical Digital Signal Processors (DSPs), has also been a key growth driver, achieving revenue targets and expanding customer diversity [5] - CRDO's revenues for fiscal 2025 reached $436.8 million, a 126% year-over-year increase, with Q4 revenues surging 179.7% year-over-year to $170 million [9] Group 2: Product Innovations - CRDO's 3-nanometer 200-gig-per-lane optical DSP is expected to facilitate the industry's transition to higher lane speeds [6] - The PCIe retimers and Ethernet retimers business is witnessing robust performance, particularly in AI server applications, driven by demand for 50 gig and 100 gig per lane Ethernet solutions [7][8] Group 3: Financial Outlook - For Q1 fiscal 2026, CRDO expects revenues between $185 million and $195 million, reflecting a 12% sequential increase at the midpoint, with a projected non-GAAP gross margin of 64-66% [12] - The company anticipates non-GAAP net margin to approach nearly 40% due to operating expenses growing at less than half the revenue growth rate [12] Group 4: Market Position - CRDO's stock performance has outpaced peers like Broadcom, Marvell, and Cirrus Logic, which gained 57.9%, 36.2%, and 26.9% respectively [15][20] - The company is trading at a forward 12-month Price/Sales ratio of 18.96, significantly higher than the sector average of 8.60 [21] Group 5: Investment Recommendation - Given the strong fundamentals and positive market outlook, CRDO is positioned as a strong buy, with rising investor confidence and a differentiated product offering [23][24]

Core Viewpoint - Credo Technology Group (CRDO) and Nova Limited (NVMI) are highlighted as standout companies in the tech sector, particularly in the semiconductor industry, which is currently performing well [1][11]. Company Overview - Credo specializes in high-performance connectivity solutions, while Nova provides metrology solutions for advanced process control in semiconductor manufacturing [2]. Growth Trajectories - Credo's total sales are projected to increase by 86% in FY26 to $811.4 million from $436.77 million in FY25, with FY27 sales expected to rise another 21% to $987.2 million. Annual earnings per share (EPS) are forecasted to exceed 100% growth in FY26 to $1.48, up from $0.70 in FY25, and to increase by 22% in FY27 to $1.80 [3][5]. - Nova's sales are anticipated to grow by 28% this year, reaching $923.4 million in FY26, with EPS expected to rise by 26% in FY25 and another 10% in FY26 to $9.33 [5][6]. Stock Performance - Credo's stock has increased nearly 40% year-to-date, while Nova's shares have gained 43%. Over the past three years, Credo's stock has surged over 650%, and Nova's shares have risen more than 200%, outperforming broader market indexes [7]. Earnings Estimates and Revisions - Credo's FY26 and FY27 EPS estimates have risen over 30% in the last 60 days, indicating potential for further upside [8][9]. - Nova's FY25 EPS estimates have seen slight increases in the past two months, with FY26 estimates up by 3% [9]. Market Position - Both companies are positioned in the top 35% of Zacks' Electronics-Semiconductors Industry, reflecting a strong business environment and growth potential [1][11].

[Part I](index=9&type=section&id=Part%20I) - The company's mission is to provide high-speed, energy-efficient connectivity solutions for AI, cloud computing, and hyperscale networks, leveraging its core SerDes and DSP technologies[23](index=23&type=chunk) - Credo's product families include integrated circuits (ICs), Active Electrical Cables (AECs), and SerDes Chiplets, with intellectual property (IP) solutions primarily consisting of SerDes IP licensing[24](index=24&type=chunk) - The company utilizes a fabless business model, contracting with third-party foundries like TSMC for wafer production and other partners for packaging, assembly, and testing[65](index=65&type=chunk)[71](index=71&type=chunk) Fiscal Year Financial Highlights | Fiscal Year | Total Revenue | Product Revenue % | IP License Revenue % | | :--- | :--- | :--- | :--- | | **2025** | $436.8 million | 97% | 3% | | **2024** | $193.0 million | 85% | 15% | [Business Overview](index=9&type=section&id=Item%201.%20Business) Credo Technology provides high-speed connectivity solutions, including ICs, Active Electrical Cables (AECs), and SerDes IP, for the AI, cloud computing, and hyperscale network markets. The company's products are based on its proprietary SerDes and DSP technologies, supporting speeds from 100G to the emerging 1.6T. In fiscal 2025, revenue grew to $436.8 million from $193.0 million in fiscal 2024, driven primarily by product sales which constituted 97% of total revenue. The company operates a fabless model, relying on partners like TSMC for manufacturing, and serves a concentrated base of blue-chip clients, including major hyperscalers [Industry Overview and Growth Strategy](index=10&type=section&id=Industry%20Overview%20and%20Growth%20Strategy) - Market growth is driven by strong secular tailwinds, including the explosion in network traffic from AI/ML, the doubling of hyperscaler general compute traffic every 2-3 years, and the proliferation of 5G and high-speed consumer connectivity standards like PCIe[30](index=30&type=chunk)[32](index=32&type=chunk)[35](index=35&type=chunk) - The company's growth strategy focuses on extending its leadership in SerDes technologies, broadening its product and IP portfolio, acquiring new customers, and deepening relationships with existing ones[41](index=41&type=chunk)[45](index=45&type=chunk) [Products and Solutions](index=12&type=section&id=Our%20Products%20and%20Solutions) - Credo offers a comprehensive suite of connectivity solutions including: - **HiWire AECs®**: Plug-and-play copper interconnects for data centers, offering alternatives to DACs and AOCs - **Optical DSPs**: Key components in optical transceivers for various networks, with families like Seagull (50G/lane), Dove (100G/lane), and the new Lark (800G) - **Line Card PHYs**: Retimers, Gearboxes, and MACsec devices for PAM4/NRZ backplane connectivity - **SerDes Chiplets & IP**: Enabling high-rate data transmission for MCM and SoC integration - **PCIe Retimers**: Toucan family for extending PCIe Gen6.x/CXL 3.x trace lengths - **PILOT Software Platform**: A new platform for predictive link integrity, optimization, and telemetry[43](index=43&type=chunk)[44](index=44&type=chunk)[47](index=47&type=chunk) [Customers, Sales, and Manufacturing](index=14&type=section&id=Customers%2C%20Sales%2C%20and%20Manufacturing) - The company has a high degree of customer concentration. In fiscal 2025, the top 10 customers accounted for approximately **90% of total revenue**, with a single customer representing **67% of total revenue**[60](index=60&type=chunk) - Credo employs a two-pronged sales strategy, targeting both end-users (like hyperscalers) and their suppliers (OEMs, ODMs), which has led to its solutions being specified by end-customers[61](index=61&type=chunk)[62](index=62&type=chunk) - The company operates a fabless model, using TSMC exclusively for semiconductor wafer production in fiscal 2025, and partners like Amkor, ASE, KYEC, and BizLink for assembly, testing, and AEC manufacturing[65](index=65&type=chunk)[71](index=71&type=chunk) [Research & Development and Intellectual Property](index=15&type=section&id=Research%20%26%20Development%20and%20Intellectual%20Property) R&D Expense | Fiscal Year | R&D Expense | | :--- | :--- | | **2025** | $146.0 million | | **2024** | $95.5 million | - As of May 3, 2025, the company employed **507 engineers**, primarily located in San Jose, mainland China, and Taiwan[67](index=67&type=chunk) - As of May 3, 2025, Credo owned **78 issued U.S. patents** and **48 issued patents in mainland China**, with patents expected to expire between 2029 and 2045[69](index=69&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks, including heavy dependence on a limited number of customers, with one customer accounting for 67% of fiscal 2025 revenue. Other major risks include the lack of long-term purchase commitments, macroeconomic pressures like inflation and tariffs, intense competition from larger players like Broadcom and Marvell, and reliance on a single source (TSMC) for wafer fabrication. Geopolitical tensions, particularly concerning Taiwan and U.S.-China relations, pose a threat to operations and supply chain. The company also highlights risks related to intellectual property protection, cybersecurity threats, and the legal complexities of its international operations and Cayman Islands incorporation - **Business Risks:** High customer concentration is a primary risk, with one customer accounting for **67% of total revenue** in fiscal 2025. The loss of this or other major customers could significantly harm operating results[91](index=91&type=chunk) - **Manufacturing & Supply Chain Risks:** The company relies on a limited number of third parties, exclusively using TSMC for semiconductor wafer production in fiscal 2025. This creates significant risk related to capacity shortages, price increases, and geopolitical disruptions, particularly in Taiwan[120](index=120&type=chunk)[124](index=124&type=chunk)[194](index=194&type=chunk) - **International & Geopolitical Risks:** Operations are exposed to geopolitical tensions between the U.S. and China, including tariffs and outbound investment restrictions. The company's reliance on Taiwanese suppliers creates vulnerability to political instability between Taiwan and mainland China[98](index=98&type=chunk)[189](index=189&type=chunk)[194](index=194&type=chunk) - **Market & Competition Risks:** The company faces intense competition from larger, more established companies like Broadcom, Marvell, and Astera Labs. The market for high-speed connectivity is rapidly evolving, and failure to anticipate technological shifts could result in loss of market share[107](index=107&type=chunk)[108](index=108&type=chunk)[119](index=119&type=chunk) - **Financial Risks:** The company had an accumulated deficit of **$83.2 million** as of May 3, 2025, despite achieving profitability in fiscal 2025. Future profitability is not guaranteed due to expected increases in operating expenses[102](index=102&type=chunk) [Cybersecurity](index=59&type=section&id=Item%201C.%20Cybersecurity) Credo has established a cybersecurity risk management program that includes periodic risk assessments, employee training, and an incident response process. Board-level oversight is handled by the Nominating and Corporate Governance Committee and the Audit Committee. The day-to-day management is led by the IT management team, including the Director of IT with over 15 years of experience. The company maintains a cybersecurity risk insurance policy and reports no material cybersecurity incidents to date - The Board delegates cybersecurity oversight to the Nominating and Corporate Governance Committee and the Audit Committee, with the full Board receiving at least an annual briefing[275](index=275&type=chunk)[276](index=276&type=chunk) - Day-to-day management of the cybersecurity program is handled by the IT management team, which supervises internal personnel and external consultants[277](index=277&type=chunk)[278](index=278&type=chunk) - As of the report date, the company is not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[274](index=274&type=chunk) [Properties](index=60&type=section&id=Item%202.%20Properties) As of May 3, 2025, Credo leases approximately 250,580 square feet of facility space globally for research, design, sales, and administration. The primary locations are in the United States, mainland China, and Taiwan. Lease terms expire between 2025 and 2030 Leased Facilities by Location (as of May 3, 2025) | Location | Primary Use | Square Feet | | :--- | :--- | :--- | | United States | R&D, Sales, Admin | 88,896 | | Mainland China | R&D, Admin | 85,446 | | Taiwan | R&D, Admin | 69,150 | | Hong Kong | Admin | 7,088 | | **Total** | | **250,580** | [Part II](index=61&type=section&id=Part%20II) [Management's Discussion and Analysis (MD&A)](index=62&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2025, Credo's revenue increased 126.3% to $436.8 million, driven by a 184.2% surge in product sales, primarily from AEC products. This growth led to a significant turnaround in profitability, with net income reaching $52.2 million compared to a net loss of $28.4 million in fiscal 2024. Gross margin improved from 61.9% to 64.8% due to operating leverage. Operating expenses rose significantly, with R&D up 52.8% and SG&A up 64.3%, reflecting investments in growth and increased share-based compensation. The company's liquidity remains strong, with cash and cash equivalents of $236.3 million and positive cash flow from operations of $65.1 million - Total revenue for fiscal 2025 increased by **$243.8 million (126.3%)** compared to fiscal 2024, primarily due to a **$267.1 million increase** in product sales revenue from higher AEC shipment volumes[328](index=328&type=chunk)[329](index=329&type=chunk) - The company achieved net income of **$52.2 million** in fiscal 2025, a significant improvement from a net loss of **$28.4 million** in fiscal 2024[300](index=300&type=chunk) - Gross margin expanded to **64.8%** in fiscal 2025 from **61.9%** in fiscal 2024, driven by improved operating leverage as the product sales business gained scale[332](index=332&type=chunk) - End customer concentration remains high, with one end customer (Customer E) accounting for **63% of total revenue** in fiscal 2025, up from 20% in fiscal 2024[302](index=302&type=chunk) [Results of Operations](index=66&type=section&id=Results%20of%20Operations) Comparison of Key Financial Metrics (FY2025 vs. FY2024) | Metric (in thousands) | FY 2025 | FY 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$436,775** | **$192,970** | **126.3%** | | Product Sales Revenue | $412,177 | $145,048 | 184.2% | | IP License Revenue | $12,476 | $28,024 | (55.5)% | | **Gross Profit** | **$282,909** | **$119,431** | **136.9%** | | Gross Margin | 64.8% | 61.9% | +2.9 p.p. | | **Operating Expenses** | | | | | R&D | $145,994 | $95,531 | 52.8% | | SG&A | $98,918 | $60,193 | 64.3% | | **Operating Income (Loss)** | **$37,124** | **($37,058)** | **N/A** | | **Net Income (Loss)** | **$52,183** | **($28,369)** | **N/A** | - The increase in R&D expenses was primarily due to higher share-based compensation (**$20.6M**), personnel costs from new hires (**$13.3M**), and increased design and testing activities (**$10.0M**)[333](index=333&type=chunk) - The increase in SG&A expenses was mainly driven by higher share-based compensation (**$17.7M**), increased personnel costs (**$10.3M**), and higher external consultation fees (**$5.6M**)[334](index=334&type=chunk) [Liquidity and Capital Resources](index=69&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and Working Capital (in millions) | Metric | May 3, 2025 | April 27, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $236.3 | $66.9 | | Working capital | $605.8 | $485.6 | Summary of Cash Flows (in thousands) | Cash Flow Activity | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $65,083 | $32,737 | | Net cash provided by (used in) investing activities | $111,990 | ($249,485) | | Net cash (used in) provided by financing activities | ($7,728) | $175,276 | - Cash from operations in fiscal 2025 was primarily driven by net income of **$52.2 million** and non-cash charges (like **$77.4M** in share-based compensation), partially offset by a **$108.4 million** use of cash for working capital, including a **$102.5 million increase** in accounts receivable and a **$70.5 million increase** in inventory[341](index=341&type=chunk) [Market Risk Disclosures](index=72&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency exchange risk and interest rate risk. The majority of sales and expenses are in U.S. dollars, but some operational expenses are in foreign currencies, creating exposure to currency fluctuations. A hypothetical 10% weakening of the U.S. dollar would have increased fiscal 2025 operating expenses by approximately 2%. Interest rate risk stems from investments in money market funds and time deposits, where changes in rates could affect fair value and income - The majority of sales and expenses are denominated in U.S. dollars, mitigating some foreign currency risk. However, a portion of international operating expenses are in foreign currencies[356](index=356&type=chunk) - A sensitivity analysis showed that a hypothetical **10% adverse change** in exchange rates (weakened USD) would have increased fiscal 2025 operating expenses by about **2%**[358](index=358&type=chunk) - Interest rate risk exists for the company's cash equivalents and short-term investments. Rising rates could adversely impact the fair value of fixed-rate securities[359](index=359&type=chunk) [Financial Statements and Supplementary Data](index=73&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements, audited by Ernst & Young LLP, present the company's financial position as of May 3, 2025, and its performance for the fiscal year then ended. Key highlights include total assets of $809.3 million, a significant increase in revenue to $436.8 million, and a shift to net income of $52.2 million. The notes detail significant customer concentration, with one customer representing 67% of revenue, and reliance on TSMC for manufacturing. The statements also reflect substantial investments in R&D and a significant increase in share-based compensation - The independent registered public accounting firm, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and on the effectiveness of the company's internal control over financial reporting[364](index=364&type=chunk)[365](index=365&type=chunk)[372](index=372&type=chunk) - A critical audit matter identified was the valuation of inventory, specifically management's estimates for net realizable value of excess and obsolete inventory, which involves subjective judgment regarding future product demand[368](index=368&type=chunk)[369](index=369&type=chunk) [Consolidated Financial Statements](index=79&type=section&id=Consolidated%20Financial%20Statements) Consolidated Balance Sheet Highlights (in thousands) | Account | May 3, 2025 | April 27, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$809,257** | **$601,932** | | Cash and cash equivalents | $236,328 | $66,942 | | Accounts receivable | $162,144 | $59,662 | | Inventories | $90,029 | $25,907 | | **Total Liabilities** | **$127,675** | **$61,734** | | **Total Shareholders' Equity** | **$681,582** | **$540,198** | Consolidated Statement of Operations Highlights (in thousands) | Account | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Total Revenue | $436,775 | $192,970 | $184,194 | | Gross Profit | $282,909 | $119,431 | $106,194 | | Operating Income (Loss) | $37,124 | ($37,058) | ($21,235) | | Net Income (Loss) | $52,183 | ($28,369) | ($16,547) | | Diluted EPS | $0.29 | ($0.18) | ($0.11) | [Selected Notes to Financial Statements](index=84&type=section&id=Notes%20to%20Financial%20Statements) - **Customer Concentration:** A single customer (Customer A) accounted for **67% of total revenue** in fiscal 2025 and **86% of accounts receivable** as of May 3, 2025[444](index=444&type=chunk) - **Supplier Concentration:** The company outsources all of its integrated circuit manufacturing to Taiwan Semiconductor Manufacturing Company Limited (TSMC)[448](index=448&type=chunk) - **Customer Warrant:** A warrant issued to an affiliate of Amazon.com has **4.1 million shares vested** as of May 3, 2025. The company recognized **$13.2 million** as a reduction to revenue (contra revenue) in fiscal 2025 related to this warrant, which is now fully amortized[454](index=454&type=chunk)[457](index=457&type=chunk) - **Share-Based Compensation:** Total share-based compensation expense was **$77.4 million** in fiscal 2025, a significant increase from **$39.0 million** in fiscal 2024. As of May 3, 2025, total unrecognized compensation cost for RSUs was **$318.6 million**[490](index=490&type=chunk)[497](index=497&type=chunk) - **Geographic Revenue:** Revenue by destination for fiscal 2025 was primarily Hong Kong (**56%**), United States (**15%**), and Mainland China (**18%**)[517](index=517&type=chunk) [Controls and Procedures](index=105&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of May 3, 2025. Management also concluded that the company's internal control over financial reporting was effective. The independent auditor, Ernst & Young LLP, provided an unqualified opinion on the effectiveness of the internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of May 3, 2025[521](index=521&type=chunk) - Management concluded that internal control over financial reporting was effective as of May 3, 2025, and this assessment was audited by Ernst & Young LLP, which issued an unqualified opinion[523](index=523&type=chunk) - No changes in internal control over financial reporting occurred during the fourth quarter of fiscal 2025 that materially affected, or are reasonably likely to materially affect, internal controls[524](index=524&type=chunk) [Other Information](index=105&type=section&id=Item%209B.%20Other%20Information) This section discloses updates to executive Rule 10b5-1 trading plans, including terminations by two executives and the adoption of a new plan by CEO William J. Brennan. Most notably, on June 30, 2025, the Board approved a special performance-based restricted stock unit (PSU) program for key leadership. This program is designed to incentivize significant long-term shareholder value creation, with vesting tied to achieving a stock price of $116 per share, representing an approximate 100% increase from the price at the time of approval - On June 30, 2025, the Board approved a special PSU award program for key executives to drive long-term shareholder value and ensure leadership continuity[529](index=529&type=chunk) - The special PSUs are earned if the company's average stock price over 60 trading days reaches or exceeds **$116** on the first, second, or third anniversaries of the grant date[530](index=530&type=chunk) - CEO William Brennan was granted **200,000 Special PSUs**, and CFO Dan Fleming was granted **100,000 Special PSUs** under this new program[534](index=534&type=chunk) [Part III](index=108&type=section&id=Part%20III) Items 10 through 14, covering Directors, Executive Compensation, Security Ownership, Related Transactions, and Principal Accounting Fees, are incorporated by reference from the company's definitive proxy statement for its 2025 annual meeting of shareholders, which will be filed within 120 days after the fiscal year-end - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the forthcoming 2025 Proxy Statement[538](index=538&type=chunk)[539](index=539&type=chunk)[540](index=540&type=chunk) [Part IV](index=109&type=section&id=Part%20IV) This section contains the list of financial statements, financial statement schedules, and exhibits filed with the Form 10-K. All required financial statements are included in Part II, Item 8, and all schedules have been omitted as they are not applicable or the required information is included elsewhere - This part lists all exhibits filed with the annual report, including governance documents, material contracts, and certifications[546](index=546&type=chunk)[547](index=547&type=chunk)

Group 1: Market Trends - Stocks near all-time or 52-week highs indicate strong bullish sentiment, with buyers in control [1] - Stocks making new highs are likely to continue rising, especially with positive earnings estimate revisions [8] Group 2: Credo Technology Group (CRDO) - Credo Technology, rated Zacks Rank 1 (Strong Buy), offers innovative high-speed connectivity solutions, benefiting from the AI surge [3][4] - The company reported a remarkable 180% year-over-year increase in sales, significantly exceeding consensus expectations [5] - The outlook for Credo remains bullish due to sustained demand and increased AI spending [4] Group 3: Heico (HEI) - Heico, also rated Zacks Rank 1 (Strong Buy), operates in aerospace, industrial, defense, and electronics sectors, with products used in various aircraft [9] - The company achieved record Q2 sales and net income, with sales growing 15% and net income increasing by 27%, surpassing consensus expectations [10] - Both segments of Heico, Flight Support and Electrical Technologies, experienced sales growth of 19% and 7%, respectively, with an operating margin increase to 22.6% from 21.9% year-over-year [10]

Core Insights - Credo Technology Group Holding Ltd (CRDO) has experienced significant revenue growth, driven by strong demand for high-speed connectivity solutions despite facing tariff challenges and macroeconomic uncertainties [1][3][10] - The company's operating margin expanded by 2,500 basis points in fiscal 2025, indicating effective operational discipline and profitability improvements [2][10] - CRDO anticipates revenues exceeding $800 million in fiscal 2026, representing over 85% year-over-year growth, with a projected non-GAAP net margin approaching 40% [4][10] Revenue Growth - CRDO's revenues nearly tripled from the first to the fourth quarter of fiscal 2025, showcasing its ability to adapt to market shifts [3][10] - The company has seen strong growth in its HiWire Active Electrical Cables (AECs), optical products, and retimer products, with a robust pipeline for future offerings [3][4] Operational Efficiency - Operating expenses for CRDO grew at a significantly slower rate than revenues, contributing to a substantial increase in profitability [2][10] - The company is strategically aligned with AI and data center trends, enhancing its operational excellence [4] Market Position and Competitors - CRDO's share price increased by 41.4% year-to-date, outperforming the Electronics-Semiconductors industry, which grew by 13.1% [11] - The forward 12-month price/sales ratio for CRDO is 19.63, significantly higher than the sector's average of 8.67, indicating strong market positioning [12] Earnings Estimates - The Zacks Consensus Estimate for CRDO's earnings for fiscal 2026 has seen significant upward revisions over the past 60 days, reflecting positive market sentiment [13][14]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the strategy of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Credo Technology Group Holding Ltd. (CRDO) currently holding a Momentum Style Score of B [2] Group 2: Zacks Rank and Performance - CRDO has a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance in the market [3] - Stocks rated Zacks Rank 1 and 2 with Style Scores of A or B have historically outperformed the market over the following month [3] Group 3: Price Performance - CRDO shares have increased by 16.36% over the past week, significantly outperforming the Zacks Electronics - Semiconductors industry, which rose by 1.65% [5] - Over the past month, CRDO's price change is 47.03%, compared to the industry's 11.19% [5] - In the last quarter, CRDO shares increased by 114.22%, and over the past year, they gained 210.33%, while the S&P 500 only moved 5.86% and 12.83%, respectively [6] Group 4: Trading Volume - CRDO's average 20-day trading volume is 6,990,481 shares, which serves as a bullish indicator when combined with rising stock prices [7] Group 5: Earnings Outlook - Over the past two months, four earnings estimates for CRDO have been revised upwards, increasing the consensus estimate from $1.08 to $1.48 [9] - For the next fiscal year, one estimate has moved upwards with no downward revisions during the same period [9] Group 6: Conclusion - Considering all factors, CRDO is positioned as a 1 (Strong Buy) stock with a Momentum Score of B, making it a promising near-term investment option [11]