Credo Technology: Susquehanna Maintains Positive Outlook, Raises PT to $165 from $115

Credo Technology: Susquehanna Maintains Positive Outlook, Raises PT to $165 from $115

Susquehanna International Group has maintained a positive outlook on Credo Technology Group Holding Ltd (NASDAQ: CRDO) and raised its price target to $165 from $115. The firm's updated assessment reflects Credo's strong performance in the AI-driven data infrastructure market and its potential for continued growth.

Credo Technology, currently valued at $21.5 billion, has seen its stock surge nearly 300% over the past year, according to InvestingPro data. The firm cited Credo's active electrical cables (AEC) as delivering "the sweet spot of high-speed and low-cost/low-power connectivity in AI clusters" as a key factor in the decision. BofA Securities, another research firm, had previously positioned Credo as one of its top four AI-leveraged stocks, alongside NVIDIA, Broadcom, and AMD [1].

Susquehanna's update comes after Credo Technology reported impressive financial results for the first quarter of its fiscal year 2026. The company posted earnings per share (EPS) of $0.52, significantly exceeding analyst expectations of $0.35. This represents a surprise of 48.57%. Credo Technology's revenue also surpassed forecasts, reaching $223.1 million compared to the anticipated $190.63 million [2].

The company's expanding customer diversification, with the addition of a fourth hyperscaler beyond Amazon, xAI, and Microsoft, and a fifth customer reportedly on the way, has also been noted. Credo is working on expanding its pipeline to include optical technologies, with a strong gross profit margin of 65% and minimal debt [1].

Susquehanna projects Credo's core business could sustain 25-30% growth rates over the next few years, driving per-share earnings toward $3+ by calendar year 2027. The firm suggests potential upside to $5 per share if sales grow at a 50% annual pace as the AEC market doubles to over $2 billion and new pipeline additions contribute another $500 million [1].

The research firm raised its fiscal year 2026/2027/2028 earnings estimates by 30-40%, maintaining its price target calculation based on a 70x calendar year 2026 price-to-earnings ratio, which represents approximately 2x PEG ratio, at the higher end of the firm’s 1-2x range [1].

References:
[1] https://www.investing.com/news/analyst-ratings/bofa-raises-credo-technology-stock-price-target-to-165-on-ai-growth-93CH-4223727
[2] https://www.ainvest.com/news/credo-technology-earnings-release-q1-2026-mixed-short-term-reaction-stronger-medium-term-potential-2509/