CRDO · Credo Technology Group Holding
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $173.44
Note written ·
Price against the kill line
24.2% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $173.44, on record since 11 November 2026. The shares are down 53.5% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $173.44, the 50-day average of closes (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 1 August 2026, filed 2 September 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 479
- Revenue, change on a year (%)
- +114.7
- Gross margin (%)
- 64.5
- Operating margin (%)
- 25.2
- Free cash flow, four quarters ($M)
- 439
- Net cash, cash less debt ($M)
- 764
- Price to earnings (×)
- 45.9
- Enterprise value to sales (×)
- 15.1
All filed numbers
What Credo Technology Group Holding reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 479 | +114.7 | 64.5 | 25.2 |
| first filed | 437 | +157.0 | 68.2 | 35.7 |
| first filed | 407 | +201.5 | 68.5 | 36.8 |
| first filed | 268 | +272.1 | 67.5 | 29.4 |
| first filed | 223 | +273.6 | 67.4 | 27.2 |
| first filed | 170 | +179.7 | 67.2 | 19.9 |
| Pre-tax income ($M) | 129 |
| Net income ($M) four quarters: 538 | 129 |
| Diluted shares, change on a year (%) against the quarter to 2 August 2025 | +5.3 |
| Operating cash flow ($M) | 500 |
| Capital spending ($M) | 61.8 |
| Free cash flow ($M) | 439 |
| Cash and short-term investments ($M) | 764 |
| Debt ($M) | None reported |
| Net cash, cash less debt ($M) no debt reported | 764 |
| Deferred revenue ($M) at 2 August 2025, filed 4 September 2025 | 3.1 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 289 |
| Inventory ($M) | 313 |
| Shareholders' equity ($M) | 2,729 |
| Market value ($M) | 24,718 |
| Enterprise value, market value plus net debt ($M) no debt reported | 23,953 |
| Enterprise value to sales (×) no debt reported | 15.1 |
| Enterprise value to operating income (×) no debt reported | 47.4 |
| Price to earnings (×) | 45.9 |
| Price to book value (×) | 9.1 |
| Free-cash-flow yield (%) | 1.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 5.2% of shares outstanding sold short, 1.1 days of average trading to cover, −14.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $82.0M |
| 12 monthsfrom | $0 | $405.7M |
The thesis
Credo Technology's revenue is still more than doubling, but its shares have fallen 57.1% from the 22 June 2026 closing high of $302.52 and closed at $129.8 on 10 November 2026. The fiscal second-quarter report, expected around 1 December 2026 against a $525–535 million revenue guide, settles whether the decline was the chip sector or the company, and the shares still look more likely to lag the S&P 500 than lead it over the next three months.
The business numbers have not changed since 1 September 2026. Credo reported fiscal first-quarter 2027 revenue of $479.0 million, up 114.7% year over year and 9.6% from the prior quarter, in its filed results. The quarter that ended 31 October 2026 is guided to $525–535 million.
The price has changed a great deal. The PHLX Semiconductor Index fell 12.25% on 5 November 2026, its largest one-day drop since 16 March 2020, according to 24/7 Wall St. TIKR reports that Credo fell 32% in the week through 5 November 2026 with no bad news of its own. The shares are down 51.2% over three months.
The story is well known: the cable story is widely known, MaxLinear named itself as a challenger on 22 October 2026, and interest since 5 November 2026 follows sector-wide selling rather than company news.
Bullish and bearish views on Credo Technology Group Holding Ltd
The bull case on Credo Technology Group Holding Ltd (CRDO), in brief: revenue still rises every quarter. The bear case: a named rival targets the core product.
Bull case
- Revenue still rises every quarter. Fiscal first-quarter revenue of $479.0 million, reported 1 September 2026, carried a 68.0% non-GAAP gross margin. The $525 million low end of the second-quarter guide would be another sequential gain.
- The selloff had no company trigger. TIKR reports no Credo-specific bad news in the week through 5 November 2026. Nomura's Charlie McElligott attributed the 5 November 2026 chip rout largely to hedge funds taking profits in the year's biggest winners, per 24/7 Wall St.
- Analyst targets sit far above the price. TIKR put the average analyst target at $284 in early November. Stifel kept Buy with a $310 target on 5 October 2026, and Mizuho kept Outperform with a $245 target on 21 September 2026.
- Optical standards work continues. Credo and Oracle secured Open Compute Project approval for new optical transceiver telemetry specifications on 4 November 2026, per company news. ams OSRAM joined the Credo-led micro-emitter optics workstream on 27 October 2026.
- The threat from MaxLinear is narrow so far. MaxLinear's CEO said on 22 October 2026 that it sells chips to cable makers and is focused on one or two large US data centers.
Bear case
- A named rival targets the core product. MaxLinear's stated 20–30% goal for 1.6T active electrical cables, set out on 22 October 2026, threatens volume and pricing in the product that carries Credo's growth. Credo closed at $147.29 the next day, a six-month low at the time.
- The sector is in a bear market. Benzinga reported on 5 November 2026 that 28 of the 30 biggest chip names are in a bear market. 24/7 Wall St cites investors pricing in a possible slowdown in capital spending after equipment and memory makers fell harder than NVIDIA.
- Two customers dominate revenue. Trefis reported on 27 October 2026 that the largest customer was 33% of fiscal first-quarter revenue and the second largest 28%. Any order pause at either one shows up directly in the third-quarter guide.
- Margins were falling before the rout. Operating margin was 25.2% in fiscal first-quarter 2027, the lowest of five quarters, per Trefis.
- Executives keep selling. CEO William Brennan sold 16,666 shares at an average $174.87 on 19 October 2026 and CTO Chi Fung Cheng sold 27,500 at $172.62 on 20 October 2026, both under Rule 10b5-1 plans, per SEC Form 4 filings reported by MarketBeat. A further filing for Cheng was reported on 29 October 2026.
Price setup
Credo closed at $129.8 on 10 November 2026 in adjusted daily closes, 57.1% below the $302.52 closing high of 22 June 2026. The 14-day relative strength index (RSI) read 34.4, close to the 30 level that marks heavy selling.
The moves have been large in both directions. Trefis reports a 7.8% gain on 3 November 2026 and an 8.7% fall on 30 October 2026. TIKR puts the 6 November 2026 close near $121 after a 7% bounce. Trefis shows the lowest close of the past year at $87.81 on 30 March 2026.
On valuation, Trefis put the shares at 17.6 times trailing sales as of 3 November 2026, and TIKR described them as under 17 times forward earnings after the 6 November 2026 bounce.
Crowding evidence is limited to three observations: the fiscal second-quarter report is about three weeks away, executive sales continued through late October, and the shares rose and fell 7–9% in single sessions within the past two weeks.
Catalysts ahead
- ~1 December 2026 (est.): Fiscal second-quarter 2027 results and third-quarter outlook. Shows revenue against the $525–535 million guide, whether the more than $600 million optical target holds, and whether management reports any rival qualification or cable price pressure.
Elapsed catalysts
- ~12 November 2026 (est.): Credo announces the date of its fiscal second-quarter 2027 results call. Fixes the date of the report that decides the case; last year the company announced its schedule on 12 November 2025 for a 1 December 2025 report. (passed)
What would change the view
A daily close above $173.44, the 50-day average of closes (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
What it trades with
Credo has moved with the chip sector in the past month. Trefis found that 32 of 34 semiconductor peers with a market value above $2 billion rose on 3 November 2026 alongside Credo's 7.8% gain, and the PHLX Semiconductor Index fell 12.25% on 5 November 2026.
Credo's direct competitive reference is MaxLinear, whose 22 October 2026 call moved the shares 10.70% lower. Marvell, a larger interconnect supplier, lifted its fiscal 2028 revenue goal to $20 billion on 6 October 2026, per Benzinga, and was rumored on 30 October 2026 to be buying Lumentum, per Counterpoint.
Credo's demand depends on AI data-center spending by a few large customers, so hyperscaler capital-spending news and AI regulation headlines after the 2026 midterm elections affect the shares as much as company results do.
The evidence, claim by claim (8)
- Credo reported fiscal first-quarter 2027 revenue of $479.0 million, up 114.7% year over year and 9.6% sequentially, with a 68.0% non-GAAP gross margin. Credo fiscal Q1 2027 results, SEC exhibit 99.1 · as of
- Credo guided fiscal second-quarter 2027 revenue, for the quarter that ended 31 October 2026, to $525–535 million. Credo fiscal Q1 2027 results, SEC exhibit 99.1 · as of
- MaxLinear's CEO said MaxLinear targets 20% to 30% of the 1.6T active electrical cable market over the next couple of years and put Credo's share at 93% to 99%. MaxLinear Q3 2026 earnings call, via StockTwits on Yahoo Finance · as of
- The PHLX Semiconductor Index fell 12.25% to 9,011.14, its largest one-day drop since 16 March 2020; the Nasdaq Composite fell 5.52%. 24/7 Wall St, 6 November 2026 · as of
- Credo shares fell 32% in the week through 5 November 2026 with no company-specific bad news, then rose 7% on 6 November 2026. TIKR · as of
- Credo shares fell 29.0% over the month to 3 November 2026, against a 2.6% fall for the S&P 500; the highest close of the past year was $302.52 on 22 June 2026 and the lowest was $87.81 on 30 March 2026. Trefis · as of
- Credo's largest customer was 33% of fiscal first-quarter 2027 revenue and the second largest 28%; operating margin was 25.2%, the lowest of five quarters. Trefis · as of
- Credo and Oracle secured Open Compute Project approval for new optical transceiver telemetry specifications. Company news via Benzinga · as of
Sources
- Credo Technology Group Holding Ltd - Form 8-K - FY2026 · sec.gov
- Chip Stocks Just Had Their Second-Worst Day on Record · 247wallst.com ·
- What Just Happened To Credo Stock? · trefis.com
- Credo Just Dropped 32% in a Week. Is It Time to Sell, or Load Up? · tikr.com
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