Credo Technology stock rose in pre-open trading after Evercore ISI initiated coverage with an Outperform rating and a $325 price target, the highest on Wall Street for the company. Evercore painted a picture of Credo evolving beyond a primarily copper-based AI connectivity business into a hybrid copper-plus-optical platform, and provided specific growth expectations for the company’s major product lines.
In its initiation note, Evercore projected 100% growth for Credo’s Active Electrical Cable solutions in 2026 and anticipates 60% growth in 2027. The firm also estimated that Credo’s optical products could represent roughly 25% of total revenue by 2027 as that portfolio develops. On market size, Evercore sees the company’s total addressable market expanding substantially - by 10 to 20 times - from its current $5 billion to $10 billion range as the optical roadmap matures.
The analyst initiation arrived after a period of upward momentum for Credo following its June 1 release of Q4 FY2026 results. That quarter reported revenue of $437 million, a 157% increase year-over-year, and non-GAAP earnings per share of $1.16, which topped estimates. For the full fiscal year FY2026, Credo recorded revenue of $1.34 billion, more than triple the prior year.
Those results prompted several major Wall Street firms to raise their price targets in the wake of the earnings beat. Firms that adjusted their targets include Needham, Roth Capital, Bank of America, Jefferies, Mizuho, JPMorgan, and Goldman Sachs. Credo’s FY2027 guidance, which projects over 80% revenue growth, has helped keep institutional interest elevated.
Market conditions provided additional lift. U.S. trading resumed after the Juneteenth holiday, following a prior session on June 18 when the Nasdaq climbed 1.9% and the S&P 500 rose 1.1%, supported by technology-sector strength and optimism around a U.S.-Iran peace framework that eased energy-price concerns. The Federal Reserve opted to hold rates steady while flagging the possibility of at least one hike before year-end, a development that the note observed could pose a modest headwind for high-multiple growth names.
Peers in the AI connectivity space also displayed strong uptrends, with companies including Marvell Technology and Astera Labs cited as providing a supportive sector backdrop. Taken together - the high-conviction analyst initiation with a street-high target, the momentum from recent quarterly results and raised price targets, and a buoyant market reopening - Credo shares pushed to a new 52-week intraday high of $274.90, with pre-market trading extending the move to $281.84.
The combination of upgraded analyst sentiment and post-earnings momentum has driven notable buying interest, reflected in the pre-open 3.7% rise following Evercore’s initiation. Investors and market participants will be watching whether Credo can convert the expected optical progress and aggressive growth projections into the revenue mix and market expansion envisioned by Evercore and others.
Key points
- Evercore ISI initiated coverage of Credo Technology with an Outperform rating and a $325 price target, the most bullish on the street.
- Evercore forecasts 100% growth for Active Electrical Cable solutions in 2026 and 60% growth in 2027, with optical products potentially making up about 25% of revenue by 2027.
- Credo reported Q4 FY2026 revenue of $437 million, up 157% year-over-year, non-GAAP EPS of $1.16, and full-year FY2026 revenue of $1.34 billion; FY2027 guidance projects over 80% revenue growth.
Risks and uncertainties
- Execution risk in expanding the optical portfolio and achieving the revenue mix anticipated by analysts - impacts the technology and semiconductor sectors.
- Macroeconomic and policy risks such as potential Federal Reserve rate hikes, which could be a modest headwind for high-multiple growth stocks in the tech sector.
- Market sentiment dependence - valuations and stock momentum may be sensitive to broader tech sector trends and peer performance.