Credo Technology , a maker of high-speed connectivity cables used in data infrastructure, can continue to capitalize on a growing business opportunity in the market for artificial intelligence equipment, Bank of America says . The investment bank double upgraded Credo to buy from underperform on Tuesday, and raised its price target to $80 per share from $27. BofA’s forecast implied more than 67% upside from Monday’s $47.80 close, and the stock has already soared more than 45% in early trading Tuesday to a high of $69.46. Late Monday, Credo posted fiscal second quarter results showing sales and earnings above analysts’ consensus estimates, and forward revenue guidance for its third quarter that also surpassed estimates from analysts polled by FactSet. CRDO YTD mountain Credo Technology shares in 2024. The growth of artificial intelligence programs and products are likely to prove a boon for Credo’s high-speed cable business, BofA analyst Vivek Arya says. “CRDO is the leader in the active electrical cable market where a multi-year adoption cycle is now ahead of us driven by demand for power-efficient AI clusters,” the analyst wrote in a 14-page report. Credo is now estimated to see revenue of $387.5 million in 2025, up from a prior target of $320.2 million, and earnings of 50 cents per share rather than the 34 cents seen earlier, the BofA report said. “[S]ignificant operating leverage could drive earnings growth much faster than sales for the next few years,” Arya said. Credo shares have now surged 250% in 2024.
