I'm LongbridgeAI, I can summarize articles.Credo Technology's stock surged 245% in 2024, significantly outperforming major indices and competitors like Nvidia. The rise was driven by strong demand for its high-speed connectivity solutions in AI-enabled data centers. Key financial highlights include a 89% year-over-year revenue growth to $60.8 million in Q4 FY2024 and a 64% increase to $72 million in Q2 FY2025, surpassing analyst expectations. The company projects Q3 revenue between $115 million and $125 million, indicating continued strong growth. Investors are encouraged to monitor Credo's performance as it approaches its next earnings release in late February.
Shares of Credo Technology (CRDO 0.51%), which makes high-speed connectivity solutions for the data infrastructure market, skyrocketed 245% in 2024, according to data from S&P Global Market Intelligence. (In 2025, Credo stock is down 3.2% through Tuesday, Jan. 14.)
For context, Credo stock's 2024 performance was nearly 10 times the S&P 500 index's 25% return and more than 8 times the tech-heavy Nasdaq Composite index's return of 29.6%. Moreover, shares of Credo even outperformed those of the mighty artificial intelligence (AI) chip leader, Nvidia, whose shares soared 171% in 2024.
Credo stock's main catalyst in 2024 was strong demand for its products for AI-enabled data centers. These data centers are growing rapidly to support the powerful demand for AI capabilities.
Credo stock gained altitude as 2024 progressed
Credo stock went nowhere for nearly the first five months of 2024. On May 29, it had a year-to-date gain of 3.9%, lagging the S&P 500's return of 11.1% over this period.
On May 30, Credo stock jumped 27.1% following the release on the prior afternoon of its report for the fourth quarter of its fiscal year 2024 (ended April 27). The quarter's revenue grew 89% year over year to $60.8 million, in line with Wall Street's expectation. Adjusted net income was $11.8 million, or $0.07 per share, up from a loss of $0.04 per share in the year-ago period. That result surpassed the analyst consensus estimate of $0.05 per share.
Credo stock moved in a mostly upward trajectory through Dec. 2. On Dec. 3, it rocketed up 47.8% following the company's release on the prior afternoon of its report for the second quarter of its fiscal year 2025 (ended Nov. 2, 2024). It was a super report with second-quarter results easily beating Wall Street's estimates and third-quarter revenue guidance crushing the analyst consensus estimate.
Here are the highlights of the fiscal second quarter (guidance will be covered in the next section):
- Revenue surged 64% year over year to $72 million, racing by the $66.5 million Wall Street had expected.
- Product revenue increased 88% year over year to $64.4 million, accounting for 89% of total revenue. Product engineering services revenue grew 90% to $4.9 million, while intellectual property (IP) licenses revenue declined 60% to $3 million.
- Net loss based on generally accepted accounting principles (GAAP) was $4.2 million, or $0.03 per share, a 25% improvement from the net loss of $0.04 per share in the year-ago period.
- Adjusted net income was $12.3 million, which translated to earnings per share (EPS) of $0.07, up 600% from $0.01 in the year-ago period. This result topped the $0.05 analyst consensus estimate.
Continued strong AI-driven growth on the radar
For the fiscal third quarter, Credo management guided for revenue of $115 million to $125 million, which equates to growth of 161% to 184% year over year.
This revenue guidance was likely the biggest driver behind Credo stock's incredible nearly 48% rise after the release of the fiscal Q2 report. It zoomed by Wall Street's expectation of $97.6 million, or growth of 122% year over year.
If you're a growth investor, Credo stock is worth putting on your watch list. The company's next quarterly earnings release will probably be about late February.