00:00:00
Hello everyone, welcome to the Stockmind
00:00:02
Minds web channel. In the rapidly
00:00:05
evolving tech landscape, Credo
00:00:07
Technology Group Holding Limited, NASDAQ
00:00:09
CRDO, has emerged as a standout
00:00:12
performer. Specializing in high-speed
00:00:14
connectivity solutions, Crito's recent
00:00:17
Q4 2025 earnings report highlights its
00:00:20
impressive growth trajectory and
00:00:22
solidifies its position as a compelling
00:00:24
investment opportunity. In this video,
00:00:26
we will dive into Crito's recent
00:00:28
earnings, stock performance and
00:00:30
valuation, growth potential, and the
00:00:33
risks investors should consider about
00:00:36
Crito Technology. Founded in 2008 and
00:00:39
headquartered in Grand Cayman, Cayman
00:00:40
Island, Crito Technology Group develops
00:00:43
secure, high-speed connectivity
00:00:45
solutions that enhance energy efficiency
00:00:48
as data rates and bandwidth requirements
00:00:50
escalate. The company's product
00:00:53
portfolio includes integrated circuits,
00:00:55
active electrical cables, AEC's, SED
00:00:59
chiplets, and CERD IP licensing catering
00:01:03
to the needs of data centers and AI
00:01:05
applications. Crito's innovations are
00:01:08
pivotal in supporting the infrastructure
00:01:10
of major cloud service providers and
00:01:12
hyperscalers. Crito financial
00:01:14
performance. Credo Technologies
00:01:17
financial performance in Q4 2025, which
00:01:20
ended in April 2025, highlights its
00:01:23
remarkable growth trajectory. The
00:01:25
company reported revenue of 170.03
00:01:29
million for the quarter, marking a
00:01:31
significant
00:01:34
179.73% increase from 60.78 million in
00:01:38
Q4 2024. Earnings per share EPS also
00:01:43
showed a strong turnaround, rising to 20
00:01:45
cents from a loss of 6 cents in the same
00:01:47
period last year. A notable improvement
00:01:50
of
00:01:52
433.33% on a trailing 12-month TTM
00:01:56
basis. Revenue climbed
00:01:59
126.34% to
00:02:01
436.78 million, up from
00:02:06
192.97 million a year earlier. TTM EPS
00:02:10
also improved dramatically, reaching 29
00:02:13
cents compared to a loss of 18 cents
00:02:16
previously, reflecting a
00:02:19
261.11% increase. Profitability metrics
00:02:22
remain robust with a gross profit margin
00:02:25
of
00:02:27
64.77% and a net profit margin of
00:02:30
11.95%.
00:02:32
Additionally, the company posted a
00:02:34
return on assets of
00:02:36
3.37% and a return on equity of
00:02:39
8.54% while maintaining a conservative
00:02:42
capital structure with a low debt to
00:02:44
equity ratio of just
00:02:46
0.02. Over the past 5 years, Credo has
00:02:49
grown its revenue at an
00:02:51
85.5% CAGGR, while net income turned
00:02:54
positive in fiscal 2025, marking a turn
00:02:57
to profitability that is projected to
00:02:59
continue in the future. Credto fiscal
00:03:02
2026 financial forecast. Looking
00:03:05
forward, analysts are optimistic,
00:03:07
forecasting revenue of
00:03:10
$796.47 million for fiscal year 2026, an
00:03:16
82.35% increase over 2025 and projecting
00:03:20
a non-GAAP EPS of
00:03:23
$144, which would represent a
00:03:26
105.25% rise from the 2025 figure of.7.
00:03:31
Reflecting this positive outlook,
00:03:33
analysts have issued a consensus price
00:03:35
target of
00:03:37
$77.70, indicating an
00:03:40
8.04% upside potential with the most
00:03:43
bullish target reaching $94, suggesting
00:03:46
a possible gain of
00:03:48
30.7%. CRDO stock price performance and
00:03:53
valuation. Crypto Technologies stock
00:03:55
performance over the past year has been
00:03:57
nothing short of extraordinary. At the
00:04:00
time this video was created, the
00:04:02
company's share price stands at
00:04:05
$71.92, reflecting a staggering
00:04:08
185.5% increase over the past 12 months,
00:04:11
far outperforming the S&P 500's 12.9%
00:04:15
gain in the same period. Since its
00:04:17
initial public offering IPO in January
00:04:21
2022, Crito's stock has soared by
00:04:25
542.7% compared to a 34.8% 8% rise in
00:04:29
the S&P 500, underscoring its
00:04:31
exceptional market performance. Despite
00:04:34
this impressive appreciation, Credo
00:04:36
remains attractively valued relative to
00:04:38
its growth prospects. Its trailing
00:04:40
12-month TTM price to sales PS ratio is
00:04:45
31.75 with a forward PS of
00:04:49
15.22. The company's non-GAAP price
00:04:52
toearnings PE ratio stands at 88.24 24
00:04:56
on a TTM basis while the forward PE is
00:04:59
projected at
00:05:01
52.72. Based on Finch data, if we look
00:05:04
at the valuation from 2024, Credto's
00:05:08
forward PS is still in line with the
00:05:10
average and its forward PE is
00:05:12
surprisingly below the average despite
00:05:15
the stock's strong performance. These
00:05:17
valuation metrics suggest that although
00:05:19
Credto's stock has risen sharply, it
00:05:22
continues to trade at a reasonable
00:05:23
valuation considering its accelerating
00:05:25
growth, solid fundamentals, and
00:05:28
promising future outlook. Crito growth
00:05:31
potential. Crito growth prospect remains
00:05:33
robust driven by several factors. One,
00:05:37
AI and hyperscaler demand. Credto's
00:05:40
growth is inextricably linked to the AI
00:05:42
revolution which necessitates faster,
00:05:45
more reliable data transfer within and
00:05:47
between servers. CEO Bill Brennan
00:05:50
emphasized that hyperscalers,
00:05:52
large-scale cloud providers like Amazon
00:05:54
Web Services and Microsoft Azure are
00:05:56
driving surging demand for CTO's
00:05:58
energyefficient connectivity solutions
00:06:01
to power AI services. The company's AEC
00:06:04
technology, which replaces traditional
00:06:06
optical cables with lower cost, higher
00:06:09
reliability electrical alternatives, has
00:06:11
become a cornerstone of AI
00:06:13
infrastructure. Crito's AEC's offer
00:06:15
lower power consumption and cost savings
00:06:17
compared to optical modules, making them
00:06:20
ideal for scaling AI workloads. In Q4
00:06:23
2025, Crito secured a significant design
00:06:26
win for an 800 GB optical DSP with a US
00:06:30
hyperscaler with deployments expected to
00:06:33
begin in fiscal 2026. This win
00:06:35
underscores Credo's technological
00:06:37
leadership in optical connectivity, a
00:06:40
market projected to grow at 8.2% CAGGR
00:06:43
through 2032, according to Fortune
00:06:46
Business Insight. Two, product
00:06:49
innovation and market expansion. Credo
00:06:52
Technologies commitment to innovation is
00:06:54
highlighted by its pilot platform
00:06:56
launched in early 2025. This advanced
00:06:58
diagnostic tool significantly improves
00:07:01
the reliability and performance of
00:07:03
high-speed connectivity solutions, a key
00:07:05
concern for data center operators. By
00:07:08
incorporating real-time analytics, Pilot
00:07:10
helps reduce downtime and enhances
00:07:12
network efficiency, setting Credo apart
00:07:15
from competitors. Additionally, Credo is
00:07:18
making strong progress with its PCIe Gen
00:07:21
5 and Gen 6 rettimer portfolio, critical
00:07:25
for maintaining signal integrity in high
00:07:27
performance computing environments. As
00:07:29
the industry accelerates its transition
00:07:31
to PCIe Gen 6 in 2026, Credo is
00:07:35
strategically positioned to capture
00:07:37
substantial market share in this rapidly
00:07:39
growing $2 billion addressable market.
00:07:42
These innovations underscore Credto's
00:07:45
role as a leader in enabling faster,
00:07:47
more reliable data center
00:07:49
interconnectivity. Three, customer
00:07:52
diversification and supply chain
00:07:54
resilience. While Credto's top customer,
00:07:57
Amazon accounted for 61% of Q4 revenue.
00:08:01
Management highlighted progress in
00:08:03
diversifying its client base. Two
00:08:05
additional hyperscalers are expected to
00:08:07
contribute meaningfully in the second
00:08:09
half of fiscal 2026, reducing dependency
00:08:12
on a single client. CFO Daniel Fleming
00:08:15
noted that customer forecasts for AEC
00:08:17
adoption remain robust with multi-year
00:08:20
visibility into demand. This
00:08:22
diversification mitigates risk and
00:08:24
aligns with the broader industry trend
00:08:26
of hyperscalers dual sourcing critical
00:08:28
components. Despite concerns about
00:08:30
semiconductor shortages, Credo has
00:08:32
demonstrated supply chain resilience.
00:08:35
The company maintains strong
00:08:37
relationships with foundry partners,
00:08:39
enabling it to secure adequate wafer
00:08:41
capacity for its 3nm tapeouts. Ending
00:08:44
inventory of $90 million in Q4 provides
00:08:48
a buffer against potential disruptions,
00:08:50
while
00:08:52
$431.3 million in cash reserves offers
00:08:55
flexibility for strategic investments.
00:08:58
Risks to consider. While Crito's
00:09:00
prospects are promising, we should be
00:09:02
mindful of potential risks. One, intense
00:09:06
competition. Crito technology faces
00:09:09
intense competition in the semiconductor
00:09:11
and high-speed connectivity markets from
00:09:14
established giants like Broadcom and
00:09:16
MediaTek, as well as emerging players.
00:09:19
This competitive landscape could
00:09:20
pressure profit margins and market
00:09:22
share, particularly if rivals develop
00:09:24
superior technologies or offer lower
00:09:27
prices.
00:09:28
This could potentially impact Incredo's
00:09:30
growth and financial performance in the
00:09:32
rapidly evolving AIdriven data center
00:09:34
and connectivity solutions market. Two,
00:09:37
customer concentration and market
00:09:40
volatility. Crito's heavy reliance on
00:09:42
hyperscalers, a sector prone to cyclical
00:09:45
spending poses a risk if AI investments
00:09:48
slow unexpectedly. Additionally, gross
00:09:51
margin fluctuations due to product mix
00:09:53
variability could impact short-term
00:09:55
profitability. Tariff policies and
00:09:57
geopolitical tensions also present
00:09:59
supply chain risks, though Crito's
00:10:01
diversified manufacturing footprint
00:10:03
mitigates exposure. Three, cyclical
00:10:06
semiconductor industry. The
00:10:08
semiconductor industry's cyclical nature
00:10:10
poses risks for crito technology with
00:10:13
periods of high demand often followed by
00:10:15
over supply and price erosion. Economic
00:10:17
downturns or reduced demand for
00:10:20
high-speed connectivity solutions could
00:10:22
negatively impact CTO's financial
00:10:24
performance, potentially leading to
00:10:26
revenue declines and margin pressures in
00:10:28
the volatile market for AIdriven data
00:10:31
center
00:10:32
technologies. Conclusion: Credo
00:10:35
Technology Group's exceptional
00:10:38
Q42025 performance underscores its
00:10:40
status as a high growth company with
00:10:42
solid fundamentals. The company's
00:10:44
strategic focus on AIdriven connectivity
00:10:47
solutions, coupled with its impressive
00:10:49
financial metrics and stock performance
00:10:52
positions it as a compelling investment
00:10:54
opportunity. While mindful of potential
00:10:56
risks, the overall outlook for Credo
00:10:59
remains positive, making it a strong
00:11:01
candidate for investors seeking exposure
00:11:03
to the burgeoning tech infrastructure
00:11:05
sector. But remember, this is not a
00:11:07
financial advice. What do you think
00:11:10
about credo? Are you buying, holding, or
00:11:13
passing? Drop your thoughts in the
00:11:15
comments below. If you found this video
00:11:17
helpful, please make sure to like,
00:11:19
subscribe, and hit the bell so you don't
00:11:21
miss my next stock analysis.
00:11:24
Thanks for watching and see you in the
00:11:25
next