Shares of Credo Technology (CRDO 4.26%), which makes high-speed connectivity solutions for the data infrastructure market, skyrocketed 245% in 2024, according to data from S&P Global Market Intelligence. (In 2025, Credo stock is down 3.2% through Tuesday, Jan. 14.)
For context, Credo stock's 2024 performance was nearly 10 times the S&P 500 index's 25% return and more than 8 times the tech-heavy Nasdaq Composite index's return of 29.6%. Moreover, shares of Credo even outperformed those of the mighty artificial intelligence (AI) chip leader, Nvidia, whose shares soared 171% in 2024.
Credo stock's main catalyst in 2024 was strong demand for its products for AI-enabled data centers. These data centers are growing rapidly to support the powerful demand for AI capabilities.
NASDAQ: CRDO
Key Data Points
Credo stock gained altitude as 2024 progressed
Credo stock went nowhere for nearly the first five months of 2024. On May 29, it had a year-to-date gain of 3.9%, lagging the S&P 500's return of 11.1% over this period.
On May 30, Credo stock jumped 27.1% following the release on the prior afternoon of its report for the fourth quarter of its fiscal year 2024 (ended April 27). The quarter's revenue grew 89% year over year to $60.8 million, in line with Wall Street's expectation. Adjusted net income was $11.8 million, or $0.07 per share, up from a loss of $0.04 per share in the year-ago period. That result surpassed the analyst consensus estimate of $0.05 per share.
Credo stock moved in a mostly upward trajectory through Dec. 2. On Dec. 3, it rocketed up 47.8% following the company's release on the prior afternoon of its report for the second quarter of its fiscal year 2025 (ended Nov. 2, 2024). It was a super report with second-quarter results easily beating Wall Street's estimates and third-quarter revenue guidance crushing the analyst consensus estimate.
Here are the highlights of the fiscal second quarter (guidance will be covered in the next section):
- Revenue surged 64% year over year to $72 million, racing by the $66.5 million Wall Street had expected.
- Product revenue increased 88% year over year to $64.4 million, accounting for 89% of total revenue. Product engineering services revenue grew 90% to $4.9 million, while intellectual property (IP) licenses revenue declined 60% to $3 million.
- Net loss based on generally accepted accounting principles (GAAP) was $4.2 million, or $0.03 per share, a 25% improvement from the net loss of $0.04 per share in the year-ago period.
- Adjusted net income was $12.3 million, which translated to earnings per share (EPS) of $0.07, up 600% from $0.01 in the year-ago period. This result topped the $0.05 analyst consensus estimate.
Continued strong AI-driven growth on the radar
For the fiscal third quarter, Credo management guided for revenue of $115 million to $125 million, which equates to growth of 161% to 184% year over year.
This revenue guidance was likely the biggest driver behind Credo stock's incredible nearly 48% rise after the release of the fiscal Q2 report. It zoomed by Wall Street's expectation of $97.6 million, or growth of 122% year over year.
If you're a growth investor, Credo stock is worth putting on your watch list. The company's next quarterly earnings release will probably be about late February.
