AI infrastructure stocks moved in sharply opposite directions on Tuesday, with Credo Technology Group (CRDO) extending a brutal selloff while CoreWeave (CRWV) rallied after OpenAI's new Astra model provided a fresh demand catalyst. The divergence underscored how earnings guidance and contracted AI demand continue to drive individual names in the sector.
Credo opened at $170.57, about 45% below its 52-week high of $308.67, after a two-session decline wiped out roughly 30% of its value. The company's quarterly results were not weak: revenue for the quarter ended August 1 came in at $479 million, up 114.7% year over year and above the $473.3 million analyst estimate. Earnings per share of $1.20 beat the $1.17 consensus. However, full-year optical products guidance of '$600 million or more' disappointed investors who had expected a more aggressive outlook.
Despite the drop, the California State Teachers' Retirement System increased its position by 28,062.9% during Q2, adding 67.6 million shares. CalSTRS now owns about 67.84 million shares, worth roughly $18.45 billion and representing 36.38% of the company. Institutional investors overall hold 80.46% of CRDO. Wall Street's consensus rating remains a 'Moderate Buy,' with an average 12-month price target of $267.39, implying roughly 57% upside. TD Cowen and Barclays each set $300 targets, while Evercore set $292 and Mizuho rates the stock outperform with a $290 target. Zacks cut its rating from 'strong buy' to 'hold' in August. The stock trades with a trailing P/E near 60.70, but forward estimates reduce that to about 27 for FY27 and 18 for FY28; its beta of 3.22 highlights the volatility.
Insider activity added another layer: CFO Daniel Fleming and COO Yat Lam sold shares under pre-arranged Rule 10b5-1 plans, and insiders sold 376,784 shares worth approximately $88.3 million over the past three months. Credo's full-year revenue for FY26 reached $1.3 billion, up from $59 million five years earlier, with analysts projecting $2.5 billion for this year and $3.8 billion next year on AI data centre demand.
CoreWeave, by contrast, jumped 16% on Tuesday after OpenAI's new Astra model highlighted the value of its AI cloud infrastructure. CoreWeave has a $22.4 billion agreement with OpenAI to provide computing power. Second-quarter 2026 revenue was $2.58 billion, up 112% year over year and above Wall Street expectations, while the company reported a revenue backlog of approximately $104 billion and added more than $25 billion in new customer commitments during the early weeks of the third quarter. Management raised full-year 2026 revenue guidance to between $12.4 billion and $13.2 billion and forecast 2027 annual recurring revenue of $18.5 billion to $19.5 billion.
Seeking Alpha rated CoreWeave a buy with 15%-20% upside but called it the highest-risk name in its model, citing leverage and execution risks. The analysis also noted that only 36% of contracted power is currently active, leaving room for future revenue. Truist Securities raised its price target to $165 from $155, Oppenheimer maintained an Outperform rating with a $150 target, and David Tepper's Appaloosa Management added CoreWeave to its portfolio during the second quarter.
Neither CRDO nor CRWV is a cryptocurrency, and the news has no direct token-level impact on digital asset markets.
