Credo rises after Evercore $325 target, optical growth call

Shares of Credo Technology rose 8.6% in trading after Evercore ISI began coverage with an Outperform rating and a $325 price target. That target is about 20% above the stock’s record close of $271.83.

Evercore analyst Mark Lipacis argued the firm expects Credo to expand from a copper-focused AI connectivity provider into a copper-plus-optical platform. Evercore projects Active Electrical Cable (AEC) revenue will double in 2026 and then rise about 60% in 2027, and estimates Credo’s optical products could represent roughly 25% of total revenue by 2027. Evercore’s model projects 2028 EPS above $13, which implies a compound annual growth rate above 70% and is roughly 40% higher than current Street estimates.

Credo reported fourth-quarter fiscal 2026 revenue of $437 million, up 157% year over year, and non-GAAP EPS of $1.16. Full-year FY2026 revenue exceeded $1.34 billion, more than triple the prior year. Those results prompted several brokerages, including Needham, Roth Capital, Bank of America, Jefferies, Mizuho, JPMorgan and Goldman Sachs, to raise price targets ahead of FY2027 guidance that projects more than 80% revenue growth.

BNP Paribas maintained a $275 target and highlighted expanding market opportunity and clearer supply-chain visibility from hyperscaler customers. BNP Paribas analyst Karl Ackerman wrote, “We believe AECs, ZF optical transceivers, silicon photonics, Active LED Cables, and OmniConnect gearboxes expand Credo’s TAM to over $10B — or 3x from Credo’s opportunity just 18 months ago.” BNP also expects Credo’s optical DSP portfolio to exceed $100 million in fiscal 2027 and noted hyperscalers provide demand forecasts 12 to 36 months out, with firm orders placed three to six months ahead.

Credo sells full-system AEC solutions rather than standalone chips and is extending that model into optical DSPs, silicon photonics and ZFOptics modules. The company is engaged with five of the six major hyperscalers — Amazon, Meta, Microsoft, xAI and Oracle — giving investors visibility into large-scale demand for AI infrastructure components.