Credo Technology Group Holding Ltd (CRDO): A Bull Case Theory

We came across a bullish thesis on Credo Technology Group Holding Ltd (CRDO) on Deep Value Returns’ Substack. In this article, we will summarize the bulls’ thesis on CRDO. Credo Technology Group Holding Ltd (CRDO)’s share was trading at $63.65 as of 27^th May. CRDO’s trailing and forward P/E were 2120 and 56.50 respectively according to Yahoo Finance.

Credo Technology (CRDO) is poised to report its fiscal Q4 2025 earnings, and while it appears expensive trading at roughly 105x forward free cash flow, the company presents a compelling risk-reward opportunity. Despite concerns around potential slowing growth rates weighing on the stock, these risks are already largely priced in, allowing for a bullish outlook. The business has multiple levers to drive long-term value, and the reaffirmed price target of $105 by early 2026 reflects confidence in its growth trajectory.

The stock has experienced volatility recently, with a significant sell-off earlier in the year followed by a strong recovery, illustrating that short-term trading or stop-loss strategies would have hurt investors who exited prematurely. Instead, a disciplined, patient approach aligned with a long-term holding strategy is advocated, focusing on capturing the majority of the stock’s upward movement as the market better understands the company’s prospects. The author warns against chasing short-term gains around earnings announcements, noting that many investors may buy ahead of earnings hoping for a quick pop, only to face disappointment and losses, missing out on subsequent rebounds.

This reinforces the importance of sticking to a steady investment approach rather than attempting to time market tops and bottoms. Overall, while the valuation looks high, Credo Technology’s resilience, growth potential, and recent price behavior support a positive investment thesis for patient investors willing to hold through volatility and capitalize on its strategic upside over the coming year.

Previously, we have covered Credo Technology Group Holding Ltd (CRDO) in March 2025, wherein we summarized a bullish thesis by Nikhs on Substack. The author stated that the company’s earnings showed strong growth, with revenue up 154% and improved margins, driven by its reliable AI connectivity solutions. A major hyperscaler, likely Amazon, accounted for most revenue, while management expected continued growth and broader customer adoption. Since our last coverage, the stock is up 37% as of 28^th May.

Credo Technology Group Holding Ltd (CRDO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held CRDO at the end of the first quarter which was 43 in the previous quarter. While we acknowledge the risk and potential of CRDO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CRDO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.