Credo Technology Stock Jumps 8% as AI Connectivity Names Rebound and Rosenblatt Reaffirms Its $235 Target

NEW YORK — Shares of Credo Technology Group rose more than 8% in early trading Wednesday. The stock recovered as AI connectivity companies bounced back from a selloff and an analyst reaffirmed a bullish price target.

The stock gained $14.49 to $186.00 shortly after the open, up from Tuesday's close of $171.51. The move gave the company a market value of about $35.3 billion.

Rebound after a rough stretch

Credo makes high-speed connectivity products, including copper and optical cables and chips, that move data between servers in AI data centers. The stock has been hit hard in recent weeks along with other AI networking and optical companies.

On Tuesday, Credo and several optical communications peers each fell more than 5% as investors continued to pull back from AI infrastructure stocks. Those shares have been under pressure from concerns about rising debt and financing needs at companies building AI infrastructure, as well as a hotter-than-expected U.S. inflation report that raised fears of higher interest rates.

The mood changed after the market closed Tuesday. SpaceX reported third-quarter revenue well above expectations, driven by its AI cloud business. Server maker Super Micro Computer said its quarterly revenue was about $4 billion above its own forecast because of demand for AI platforms. Both reports eased worries that AI spending was slowing.

Analyst support

Rosenblatt Securities on Wednesday kept its $235 price target on Credo. The firm pointed to Credo's demonstration of its OmniConnect memory technology at the Open Compute Project Global Summit earlier this month, as well as the company's strong recent results.

OmniConnect is designed to help AI systems scale memory capacity, an increasingly important need as AI models grow larger.

Not all analysts have been as positive recently. Earlier this month, Stifel cut its price target on Credo to $310 from $350, though that target remains well above the current share price.

Strong growth

Credo's business has grown rapidly. For its fiscal first quarter of 2027, the company reported revenue of $479 million, up about 115% from a year earlier. Adjusted earnings were $1.20 per share, beating the consensus estimate of $1.17.

The company forecast second-quarter revenue of $525 million to $535 million. Its next earnings report is scheduled for Dec. 2.

Credo has been expanding beyond copper cables into optical products for AI data centers, including a 1.6-terabit active light cable and short-reach optical technology. That shift could move its business toward higher-value products.

Volatile stock

The stock has been very volatile. Over the past 52 weeks, it has traded between about $86 and $309. Even after Wednesday's gain, it remains about 40% below its peak.

After Credo's fiscal first-quarter report in early September, the stock fell from about $228 to around $171 within days, then recovered much of that loss before last week's selloff.

The shares are still up about 25% over the past year and have risen roughly elevenfold over three years, reflecting investor enthusiasm about AI networking. They trade at about 61 times trailing earnings, a high valuation that can lead to large price swings when sentiment changes.

Insiders have been steady sellers. Company insiders have made more than 300 open-market sales of the stock over the past six months and no purchases, according to disclosures compiled by Quiver Quantitative.

What to watch

Investors will be watching earnings from major cloud providers and chip companies over the next few weeks for signs that AI data center spending is still growing. Because Credo's products connect servers within those facilities, its growth depends directly on how quickly hyperscale customers expand their AI clusters.