By Credo Technology Group stock has slumped and moved into a bear market after slumping by nearly 50% from its highest point this year. It dropped to a low of $148 this week, its lowest level since April 14.
Credo’s slump coincided with the ongoing retreat of other companies in the AI industry, including Coherent, Lumentum, CoreWeave, and Nebius. All these stocks have slumped by over 30% from their peak this year.
Credo Technology Group slumps despite strong growth
CRDO stock has slumped in the past few months as concerns about the technology and artificial intelligence (AI) industry have continued. These concerns rose after several leaders in the AI industry, including those from companies like OpenAI, Anthropic, DeepSeek, and SpaceX, warned about the state of the artificial intelligence industry.
The officials have warned that, left unchecked, AI growth could pose major risks, including ending humanity as soon as 2030. They have also called for a global coordination on the AI industry.
Therefore, investors assume that these fears will lead to a slowdown in the AI industry, which explains why companies in the industry have slumped.
However, fundamentally, the sector will continue growing as competition between model providers continues. This, in turn, will lead to more demand for GPUs, CPUs, servers, and storage products as the data center buildup continues.
The most recent results showed that Credo Technology’s revenue continued rising in the first quarter. Its revenue rose by 9.6% sequentially and by 114.7% from a year earlier to $479 million.
This growth is coming from the rising demand for its active electrical cables (AEC), which are copper cables built into the connectors to clean up and retime signals. Its growth also happened because of its optical DSPs, SerDes technology tools, and PCIe /CXL connectors.
The company and analysts believe that its revenue growth will continue in the near term. 16 analysts tracking the company have an average Q2 revenue growth target of 98% to $531 million.
For the year, analysts expect the company’s annual revenue to come in $2.5 billion, up by 87% from what it made last year. This growth will continue, rising to over $3.8 billion next year. Chances are that the revenue will be better than that.
Analysts are largely bullish on the company, with Evercore having a target of $292 and JPMorgan targeting $310. Other analysts, including Bank of America, Roseblatt, TD Cowen, and Susquehanna, see the stock continue rising.
Credo Technology stock technical analysis
CRDO stock chart | Source: TradingView
The daily chart shows that the CRDO stock has slumped in the past few months. It formed a double-top-like pattern at $284 and a neckline at $176, its lowest level on July 29.
It has moved below the Strong, Pivot, Reverse level of the Murrey Math Lines tool. The stock has remained below the 50-day Exponential Moving Average (EMA).
Technicals suggest that the stock will remain under pressure, potentially to the ultimate support level of $125. The alternative is that the stock rebounds as the AI fears ease.
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