Key Takeaways
- Credo Technology fell 14% today as an AI hardware sell-off over Democrats’ midterm sweep entered a second day.
- The drop prices in a slower data center buildout that hasn’t shown up in Credo’s guidance or analysts’ estimates.
- Oracle, Arista Networks and Bloom Energy fell too, though Oracle and Arista still report fast-growing AI demand.
- Credo’s forward P/E is at a three-year low, and its December report is the next test.
Credo Technology (CRDO) stock is down 14% today, the day after it fell 10% on Democrats’ midterm sweep.
The selling hit AI’s builders and suppliers. Oracle (ORCL) is down 6%, Arista Networks (ANET) is off 9%, and Bloom Energy (BE) is down 15%.
A Texas-sized worry
In Texas, Gina Hinojosa beat Gov. Greg Abbott on a promise of an immediate data center moratorium, and Yorkville Ives & Co.’s Dan Ives says 25% to 30% of coming data center capacity will come from the state. Wells Fargo’s chief equity strategist, Ohsung Kwon, had warned that a Democratic win in that race could be a “left-tail event” for the AI trade.
Credo feels that more than most: its active electrical cables supplied over 99% of its revenue growth in fiscal 2026.
Bloom fell even after NTT DATA announced a 900 MW fuel cell agreement with it this morning. Investors are selling the theme.
Credo’s outlook hasn’t budged
In September, Credo guided fiscal second-quarter revenue to $525 million-$535 million and full-year growth of more than 85%. Analysts expect revenue to nearly triple from fiscal 2026 to fiscal 2028:
A slower Texas buildout would hit the fiscal 2028 estimate first; this year’s has management’s guide behind it.
The spending behind those numbers hasn’t slowed yet. Oracle delivered 850 MW of additional data center capacity in its quarter ended Aug. 31 and said in September that AI cloud demand is still growing faster than supply. Arista guided on Tuesday for fourth-quarter revenue of $3.9 billion-$4.0 billion, up from $3.66 billion in the third quarter.
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
Cheaper than it’s been in years
Credo’s forward P/E sat at 19x on TIKR’s latest reading, a three-year low and far below its 63x average:
At today’s price, it’s even lower.
The risk is concentration: four customers bought 84% of Credo’s revenue in the quarter ended Aug. 1.
The market is charging Credo for a slowdown no customer has announced, and at this multiple, the drop looks overdone to me.
Of course, no moratorium is law yet. The next test is Credo’s report in early December.
So what is Credo 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 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.
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!
