Key Takeaways
- Credo Technology stock fell 14% in the past week after Democrats’ midterm sweep hit AI data center stocks, and Lumentum and Marvell fell with it.
- Credo had no bad news of its own, and its guidance for the current quarter still stands.
- Analysts expect its normalized EPS to nearly triple from fiscal 2026 to fiscal 2028, but its forward P/E is near a three-year low.
- The stock looks like a buy ahead of its early-December report, the next test of demand.
Credo Technology (CRDO) stock is down 14% in the week through Nov. 10. Democrats won both chambers of Congress and key governors’ races in the Nov. 3 midterms, several of them on promises of tougher limits on data center construction, and AI hardware stocks sold off hard.
Lumentum (LITE) fell 14% too, and Marvell Technology (MRVL) fell 10%. That compares with a 2% dip for the Nasdaq 100, which won back most of its 6% plunge on Nov. 5.
Texas is the big worry
In Texas, Gina Hinojosa beat Gov. Greg Abbott after campaigning for an immediate data center moratorium. In a note on Nov. 4, Dan Ives of Yorkville Ives & Co. called Texas the “biggest worry” for the AI trade, since around 25% to 30% of data center capacity will come from there.
Lumentum and Marvell sell into the same data centers as Credo, and Marvell agreed on Nov. 2 to buy Lumentum in an all-stock deal valued at $115 billion. Marvell is betting that optical links will replace copper cables, Credo’s core business. That means Credo will face a bigger rival once the deal closes, which is expected in the first half of 2028.
Nothing changed inside Credo
Credo’s September report showed first-quarter fiscal 2027 revenue of $479 million, up 115%. It also guided second-quarter revenue to $525 million to $535 million, above the $516.5 million analysts expected.
As of Oct. 21, analysts expected normalized EPS to rise from $3.46 in fiscal 2026 to $9.71 in fiscal 2028:
Credo hasn’t said anything since the election that would give analysts a reason to trim those estimates. A Texas moratorium that actually slows the buildout could.
TIKR tracks 20 analysts on Credo Technology. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Credo Technology, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Credo Technology’s Analyst Ratings
December’s report has to show the orders are still coming
Credo was already trading at about 21x forward earnings on Oct. 30. After the selloff it’s at about 18x, against a three-year average of 62x:
Four customers bought 84% of first-quarter revenue, so one cut order would show up fast. Still, the price assumes a data center slowdown that Credo’s guidance doesn’t show, which makes the selloff look overdone. The next report, expected in early December, will show whether hyperscalers kept ordering after the election.
So what is Credo Technology stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Credo Technology could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Value Credo Technology for free
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
