Credo Technology Group Holding Ltd (CRDO) shares jumped over 8% on Monday after Evercore ISI analyst Mark Lipacis initiated coverage with an Outperform rating and a $325 price target, approximately 20% above Friday’s record-high close of $271.83. The bullish call, the most aggressive on Wall Street, came alongside a separate upbeat note from BNP Paribas, intensifying investor focus on the AI connectivity provider.
Lipacis argued that the market is underestimating Credo’s long-term potential, framing it too narrowly as a copper-based AI play. “We believe it will be increasingly viewed as a broad copper + optical AI-connectivity play,” he wrote, anticipating a major valuation re-rating as the company’s optical portfolio gains traction. Evercore’s projections call for 100% growth in Credo’s core Active Electrical Cable (AEC) copper business in 2026, followed by 60% growth in 2027. By 2027, the optical segment — including optical DSPs, silicon photonics, and ZFOptics modules — is expected to account for roughly 25% of total revenue.
The firm’s 2028 earnings per share estimate exceeds $13, implying a compound annual growth rate above 70%, roughly 40% above consensus. At the $325 target, the stock would trade at a price/earnings-to-growth ratio of just 0.4x based on those estimates. BNP Paribas analyst Karl Ackerman maintained a constructive view with a $275 target, highlighting that Credo’s total addressable market has expanded to over $10 billion, triple the opportunity from 18 months ago. He flagged strong supply chain visibility, with hyperscaler customers providing demand forecasts 12–36 months out and firm orders placed three to six months in advance.
Credo, which works with five of the six major hyperscalers including Amazon, Meta, Microsoft, xAI, and Oracle, reported Q4 fiscal 2026 revenue of $437 million (up 157% year-over-year) and full-year revenue of $1.34 billion. Multiple brokerages raised price targets after the earnings beat, reflecting confidence in sustained AI infrastructure demand. Evercore’s initiation and the broader bullish sentiment underscore the belief that Credo’s expanding optical capabilities could dramatically widen its addressable market by 10 to 20 times.
