Credo Technology Group Holding Ltd surged almost 50% on Tuesday after news of an “inflection point” in results fetched a double upgrade by Bank of America analysts.
Chief executive Bill Brennan hailed a “turning point” and flagged “even greater demand than initially projected” for artificial intelligence goods in second-quarter figures on Tuesday.
These showed revenue up 64% at $72 million, a 600% surge in per-share earnings to $0.07 and guidance of $120 million in turnover for the coming quarter, against forecasts of $85 million.
“Our prior cautious view was based on limited total addressable market assumptions for architecture, engineering, and construction,” Bank of America analysts noted in response.
“But Credo's earnings call addressed those concerns nicely,” analysts said, highlighting customers Microsoft, Amazon and Tesla, alongside “growing momentum” elsewhere.
Bank of America lifted Credo from an ‘Underperform’ to a ‘Buy’ rating as a result and upped its share price target from $27 to $80.
“Credo's outlook suggests the start of a multi-year adoption cycle for its Active Electrical Cable (AEC) product that enables power-efficient AI clusters,” Bank of America added.
Shares jumped 45.4% to $69.50 on Tuesday.