Credo Technology surges 8.6% as Evercore issues $325 price target

Credo Technology Group shares surged 8.6 percent after Evercore ISI initiated coverage with a $325 price target, the most bullish call on Wall Street.

"The market is underestimating Credo's long-term opportunity as it evolves from a copper-focused AI connectivity provider into a broader copper-plus-optical platform," Mark Lipacis, analyst at Evercore ISI, said.

The $325 target implies roughly 20 percent upside from Friday's record close of $271.83. Evercore projects 100 percent growth in Credo's Active Electrical Cable business in 2026, followed by 60 percent growth in 2027, with optical products potentially accounting for about 25 percent of total revenue by 2027. The firm estimates Credo's total addressable market could expand 10 to 20 times from its current $5 billion to $10 billion range as optical capabilities scale.

Lipacis projects 2028 earnings per share above $13, implying a compound annual growth rate exceeding 70 percent and roughly 40 percent above consensus estimates. At that projection, the stock trades at a price-to-earnings-to-growth ratio of 0.4 times, according to Evercore.

The initiation came on the same day BNP Paribas analyst Karl Ackerman maintained a constructive stance with a $275 price target, highlighting that Credo's total addressable market has expanded to more than $10 billion — or three times the opportunity from 18 months ago.

Credo reported fourth-quarter fiscal 2026 revenue of $437 million, up 157 percent year over year, with non-GAAP earnings per share of $1.16 beating estimates. Full-year fiscal 2026 revenue more than tripled to $1.34 billion. The company guided for more than 80 percent revenue growth in fiscal 2027, with management projecting more than $600 million in optical revenue.

The company is engaged with five of the six major hyperscalers, including Amazon, Meta, Microsoft, xAI and Oracle, reinforcing its role in AI infrastructure buildouts. Credo's optical digital signal processor portfolio is expected to surpass $100 million in sales in fiscal 2027, according to BNP Paribas.

The Evercore initiation signals that institutional investors may be underpricing Credo's transition from a copper connectivity supplier to a full-stack optical platform player. The next catalyst is the fiscal first-quarter 2027 earnings report, where optical revenue contribution and hyperscaler order visibility will be closely watched.

This article is for informational purposes only and does not constitute investment advice.