Key Takeaways
- Evercore ISI launched coverage on Credo Technology (CRDO) with an Outperform designation and $325 price objective, approximately 20% higher than Friday’s all-time closing price of $271.83.
- The firm forecasts 100% expansion in Credo’s primary AEC copper segment during 2026, with an additional 60% increase projected for 2027.
- Analysts anticipate Credo’s optical product line will comprise 25% of overall revenues by 2027, multiplying its market opportunity by 10x–20x.
- Evercore’s financial models suggest earnings per share exceeding $13 by 2028, representing a three-year compound annual earnings expansion rate surpassing 70%.
- BNP Paribas independently reaffirmed Credo as a major AI infrastructure winner, highlighting a total addressable market now topping $10B — tripling in merely 18 months.
Credo Technology (CRDO) shares advanced 3.5% during Monday’s trading session following Evercore ISI analyst Mark Lipacis’s coverage initiation with an Outperform rating and $325 price objective. This target represents approximately 20% upside from the stock’s record-high closing price of $271.83 achieved on Friday.
Credo Technology Group Holding Ltd, CRDO
The coverage launch coincided with BNP Paribas releasing its own optimistic analysis on the semiconductor company, creating a confluence of positive catalysts for CRDO shareholders.
Lipacis contends that the investment community is significantly undervaluing the magnitude of Credo’s long-term growth trajectory. Currently, most market participants perceive the company primarily as a copper-focused AI connectivity provider — a perspective that Evercore considers overly restrictive.
The investment bank’s central investment argument centers on Credo experiencing a substantial valuation expansion as its optical solutions gain market acceptance.
“We believe it will be increasingly viewed as a broad copper + optical AI-connectivity play,” Lipacis stated in his client communication.
Credo established its market position by offering comprehensive Active Electrical Cable (AEC) solutions — delivering integrated cable assemblies with embedded silicon — instead of discrete chip components. The company is now deploying this identical integrated approach to optical technologies, introducing optical DSPs, Silicon Photonics capabilities, and its ZFOptics module platform.
Evercore’s Financial Projections Exceed Street Estimates
Evercore’s revenue and earnings forecasts represent notably ambitious targets. The investment firm anticipates 100% year-over-year growth in Credo’s established AEC copper business throughout 2026, with another 60% expansion following in 2027.
Regarding optical products, Evercore projects the emerging portfolio will gain significant momentum in late 2026 and could represent 25% of consolidated revenues by 2027.
The most striking projection involves 2028 earnings per share: exceeding $13, which translates to a three-year compound annual earnings growth rate above 70%. This forecast sits roughly 40% higher than current Wall Street consensus estimates.
At the $325 price target, Evercore maintains the valuation remains attractive — calculating a PEG ratio of merely 0.4x when measured against those 2028 projections.
BNP Paribas Echoes Optimism, Identifies $10B+ Market Opportunity
BNP Paribas analyst Karl Ackerman contributed his own positive assessment independently. While maintaining his $275 price objective, he presented a comprehensive framework explaining Credo’s dramatically expanded addressable market.
“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,” Ackerman noted.
Ackerman highlighted customer base diversification as an increasingly favorable development. He anticipates three to four hyperscale clients each contributing 10%+ of revenue by fiscal 2027, with emerging cloud providers potentially reaching 20% of total sales over time.
Credo maintains business relationships with five of the six leading hyperscalers — widely understood to encompass Amazon, Meta, Microsoft, xAI, and Oracle.
BNP additionally emphasized robust supply chain transparency, with hyperscale customers supplying demand projections spanning 12 to 36 months and confirmed purchase orders submitted three to six months ahead of delivery.
Credo’s optical DSP product family is positioned to exceed $100M in revenue during fiscal 2027.
