Credo Technology Surges 8.1% on Earnings Beat and Strategic Shifts—What’s Next?

Summary
• Credo Technology (CRDO) surges 8.1% to $134.91, hitting 52-week high of $141.09
• Q1 revenue jumps 31% sequentially, non-GAAP net income soars to $98.3M
• Patent settlements with Volex and Amphenol boost investor confidence

Credo Technology’s stock is trading at a record intraday high of $141.09, driven by a stellar Q1 earnings report and strategic advancements in optical connectivity. The stock’s 8.1% surge reflects optimism around revenue growth, margin expansion, and sector tailwinds in AI-driven connectivity solutions.

Earnings Beat and Optical Strategy Drive Credo’s 8.1% Surge
Credo’s 8.1% rally stems from a Q1 revenue surge of 31% sequentially to $223.1M and a non-GAAP net income of $98.3M, up 51% from the prior quarter. The company’s strategic pivot to optical solutions, including 1.6T transceivers and PCIe Retimer adoption, has positioned it to capitalize on AI-driven connectivity bottlenecks. Additionally, settlements with Volex and Amphenol resolved long-standing patent disputes, reducing legal overhang. Analysts highlight the AEC market’s expansion potential, with copper replacing optical connections due to reliability and power efficiency, further bolstering investor sentiment.

Semiconductor Sector Rally as Credo Outperforms Peers
The Semiconductor sector, led by NVDA’s 0.2% intraday gain, has seen robust earnings growth, with S&P 500 semiconductors up 52.19% year-to-date. Credo’s 8.1% surge outpaces the sector’s 0.54% daily return, reflecting its niche focus on AI connectivity and optical solutions. While peers like AMD and QCOM show mixed momentum, Credo’s strategic alignment with hyperscaler demand and optical innovation positions it as a high-growth outlier.

Options and ETF Strategies for Credo’s Volatile Rally
• MACD: 5.13 (above signal line 4.90), Histogram: 0.22 (bullish divergence)
• RSI: 53.28 (neutral), 200-day MA: $71.07 (far below current price)
• Bollinger Bands: Upper $131.29 (near current price), Middle $118.74

Credo’s technicals suggest short-term bullish momentum, with the 200-day MA acting as a strong support. The stock is trading above its 30D MA ($115.10) and 100D MA ($82.32), indicating a breakout. For options, focus on high-leverage, high-liquidity contracts with moderate delta and strong theta/gamma:

1. CRDO20250912C125 (Call, $125 strike, 2025-09-12 expiry)
• IV: 68.38% (reasonable)
• Delta: 0.770572 (moderate)
• Theta: -0.674525 (high time decay)
• Gamma: 0.021007 (strong sensitivity)
• Turnover: 96,980 (high liquidity)
• Leverage: 11.60% (moderate)
• Price change: +8.32% (bullish)
• Payoff at 5% upside: $134.91 → $139.16 → $4.16 profit per contract
• Ideal for aggressive bulls capitalizing on short-term momentum.

2. CRDO20250912C126 (Call, $126 strike, 2025-09-12 expiry)
• IV: 88.75% (high)
• Delta: 0.706045 (moderate)
• Theta: -0.745874 (high time decay)
• Gamma: 0.018388 (strong sensitivity)
• Turnover: 68,948 (high liquidity)
• Leverage: 10.93% (moderate)
• Price change: +14.95% (bullish)
• Payoff at 5% upside: $134.91 → $139.16 → $3.16 profit per contract
• Suitable for traders expecting a continuation of the rally with higher implied volatility.

Aggressive bulls may consider CRDO20250912C125 into a bounce above $134.91, while those seeking higher leverage with moderate risk could target CRDO20250912C126.

Backtest Credo Technology Stock Performance

Credo’s Momentum Intact—Position for Next Move as Sector Leaders Rally
Credo’s 8.1% surge is underpinned by earnings strength, strategic optical innovation, and sector tailwinds. The stock’s technicals and options activity suggest continued bullish momentum, with key resistance at $141.09 (52-week high) and support at $130.00. Investors should monitor the 200-day MA ($71.07) as a critical long-term support level. With the Semiconductor sector led by NVDA (0.2% intraday gain) showing resilience, Credo’s focus on AI-driven connectivity positions it to outperform. Watch for $130 support or sector rotation signals to refine entry/exit timing.