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Credo Technology Group Holding Ltd (CRDO) will report its fourth-quarter fiscal 2025 results on June 2.The Zacks Consensus Estimate for the bottom line in the to-be-reported quarter is pegged at 27 cents compared with 7 cents reported in the prior year quarter. The estimate has remained unchanged in the past 60 days. The consensus estimate for total revenues is pinned at $160 billion, implying a 163.2% year-over-year increase.For the fiscal fourth quarter, CRDO expects revenues between $155 million and $165 ...

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Core Insights - Credo Technology Group Holding Ltd (CRDO) has launched PILOT, a proprietary platform for Predictive Integrity, Link Optimization, and Telemetry, aimed at enhancing connectivity solutions [1][2]. Product Overview - PILOT is designed to provide real-time visibility into link health, predictive diagnostics, and troubleshooting tools across Credo's portfolio, including SerDes IP, retimer ICs, and Active Electrical Cables (AECs) [2][4]. - The platform is currently available for evaluation on Credo's PCIe retimers, with plans for broader support across its entire product range [4]. Technological Capabilities - PILOT continuously analyzes link quality parameters such as received eye quality and signal-to-noise ratio, enabling early detection of signal degradation [5]. - It actively maintains link health, reducing intermittent disconnects that can impact high-load compute tasks [6]. - The platform incorporates AI models to predict potential failures, allowing IT teams to plan preemptive maintenance interventions [7]. Security and Flexibility - Security features include optional secure boot, encrypted attestation reports, and support for zero-trust environments, ensuring compliance with enterprise-grade security standards [8]. Market Position and Growth - Credo is focusing on energy-efficient solutions for AI, cloud, and hyperscale networks, with a strong interest in its PCIe and Ethernet retimers [9][10]. - For Q3 fiscal 2025, CRDO reported revenues of $135 million, reflecting an 87% sequential increase and a 154% year-over-year growth, driven by demand from hyperscale customers [11]. - The company expects Q4 revenues between $155 million and $165 million, indicating a projected growth of 163.2% year-over-year [12]. Stock Performance - CRDO shares have increased by 210.3% over the past year, outperforming the Zacks Electronics-Semiconductors industry, which grew by 17.3% [13].

Core Insights - The semiconductor companies Credo Technology Group Holding Ltd. (CRDO) and Broadcom Inc. (AVGO) are positioned to benefit from the rapid transformation of the data center market driven by AI and digital initiatives [1][2] Group 1: Credo Technology Group Holding Ltd. (CRDO) - Credo is gaining market presence in Ethernet and Active Electrical Cables (AECs) for data centers, with AEC products experiencing triple-digit sequential growth in Q3 of fiscal 2025 [4] - The demand for AECs is increasing due to their reliability, offering over 100 times improved performance compared to laser-based optical solutions, solidifying Credo's market position [4][6] - CRDO is expanding its product portfolio to include PCIe solutions to meet the growing demand for AI scale-out and scale-up networks [5] - Strong customer interest in CRDO's PCIe and Ethernet retimers highlights the importance of high-performance solutions in the expanding AI server market, with PCIe retimer demand expected to exceed $1 billion by 2027 [6] - The launch of the Lark Optical DSP family aims to enhance 800G optical transceivers, with products designed for power efficiency in AI data centers [7] - For Q4 of fiscal 2025, CRDO expects revenues between $155 million and $165 million, indicating a growth of 163.2% year-over-year [8] Group 2: Broadcom Inc. (AVGO) - Broadcom is a diversified semiconductor company with a strong focus on AI chip development [9] - AVGO anticipates significant opportunities in the AI sector, with three hyperscaler customers planning to deploy 1 million XPU clusters by 2027, leading to a serviceable addressable market of $60 billion to $90 billion for XPUs and networks [10] - The next-generation XPUs are being developed in 3 nanometers, with plans for the first 2-nanometer AI XPU, targeting large-scale clusters for hyperscale customers [11] - In the last reported quarter, AVGO's semiconductor solutions revenues totaled $8.2 billion, an 11% year-over-year increase, with AI-related revenues growing 77% to $4.1 billion [12] - For Q2 of fiscal 2025, Broadcom expects revenues of $14.9 billion, with AI semiconductor revenues projected to grow 44% year-over-year to $4.4 billion [13] Group 3: Price Performance and Valuation - Over the past month, CRDO and AVGO have seen stock gains of 67.8% and 36.3%, respectively [14] - In terms of forward 12-month Price/Sales ratio, CRDO is trading at 15.50X, slightly lower than AVGO's 16.05X [15] Group 4: Analyst Estimates - Analysts have kept earnings estimates unchanged for CRDO in the past 90 days, while AVGO has seen a marginal upward revision in estimates [16][20] - CRDO currently holds a Zacks Rank 3 (Hold), while Broadcom carries a Zacks Rank 2 (Buy), indicating AVGO may be a better investment pick at this time [20]

Group 1 - The article discusses the investment analysis of Credo Technology Group Holding Ltd (NASDAQ: CRDO) and highlights that the stock price has not recovered since its local top in early February [1] - Daniel Sereda is identified as the chief investment analyst at a family office, emphasizing his expertise in filtering vast amounts of information to extract critical investment ideas [1] - The investing group Beyond the Wall Investing is mentioned as a platform providing access to high-quality analysis and insights prioritized by institutional market participants [1]

Group 1 - Credo Technology Group (NASDAQ: CRDO) is starting to resemble Super Micro Computer (SMCI) in its trading profile, similar to SMCI's performance in 2022 when it was trading around $81 [1] - Henriot Capital emphasizes a quant-driven investment approach, focusing on simplicity and common sense to drive success [1] - The investment strategy involves a motto of "invest first, investigate later," where stock selections are based on model recommendations without human bias [1]

Core Viewpoint - Credo Technology Group Holding Ltd (CRDO) has experienced a significant stock decline of 33.3% over the past three months, which is notably higher than the Electronic-Semiconductors industry's decline of 16.4% and the broader Computer and Technology sector's decline of 11.5% [1][12][21] Price Performance - CRDO's stock gained 6.1% recently, closing at $51.39, but remains 41% below its 52-week high of $86.69 [4] - The stock's performance raises concerns among investors regarding their investment strategies [4] Market Demand and Growth Drivers - The demand for high-performance serial connectivity solutions is increasing due to exponential data growth and rapid AI proliferation, which is favorable for Credo [5] - Credo's Active Electrical Cables (AEC) product line has shown triple-digit sequential growth, driven by adoption in the data center market [6] - The company is expanding its product portfolio to include PCIe solutions, which will address the growing demand for AI scale-out and scale-up networks [7] Product Innovations - CRDO launched the Lark Optical DSP family, designed for 800G optical transceivers, which enhances performance and power efficiency for AI data centers [8] - There is strong customer interest in CRDO's PCIe and Ethernet retimers, particularly for AI server scale-out networks, with demand expected to exceed $1 billion by 2027 [9] Financial Outlook - For Q4 fiscal 2025, CRDO expects revenues between $155 million and $165 million, indicating a growth of 163.2% year-over-year [10] - In Q3 fiscal 2025, CRDO reported revenues of $135 million, up 87% sequentially and 154% year-over-year, driven by demand from its largest hyperscale customer [11] Challenges and Risks - CRDO faces challenges due to its heavy reliance on AI-related infrastructure and hyperscale cloud market spending, which are subject to cyclical fluctuations [12] - The company reported a 16% sequential increase in non-GAAP operating expenses, primarily due to higher headcount, which could pose a risk if revenue growth does not keep pace [14] - A significant portion of revenue (86%) comes from a single end customer, creating customer concentration risk [15] Competitive Landscape - CRDO's stock decline of 33.3% is steeper than peers like Broadcom and Cirrus Logic, which declined 11.6% and 6.5%, respectively [16] - The company competes with semiconductor giants such as Broadcom and Marvell Technology, which may exert competitive pressure [16] Valuation - CRDO's stock is trading at a forward 12-month Price/Sales ratio of 12.92, indicating a stretched valuation compared to the Electronic-Semiconductors sector's multiple of 6.97 [18] - In comparison, Broadcom trades at a forward P/S multiple of 14.46, while Cirrus Logic and Marvell Technology are at 2.76 and 5.71, respectively [20] Investment Recommendation - While CRDO is well-positioned in the AI-driven connectivity space, concerns regarding customer concentration, competitive pressures, and valuation suggest a cautious approach [21]

Investors might want to bet on Credo Technology Group Holding Ltd. (CRDO) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estima ...

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