Global Finance News
02 Sep 2026, 09:07
Credo Technology Stock Falls 7.8% Despite Strong Q1 Growth as Outlook Fails to Match High AI Expectations
Credo Technology (NASDAQ: CRDO) shares fell about 7.8% in premarket trading Wednesday despite reporting strong fiscal first-quarter results, as investors appeared to focus on the pace of sequential growth and the company’s guidance relative to elevated expectations for AI infrastructure stocks.
First-quarter revenue reached $479.0 million, up 114.7% year over year and 9.6% sequentially. Non-GAAP net income surged 140% from a year earlier to $236.3 million, while non-GAAP diluted EPS reached $1.20. GAAP net income was $129.4 million, or $0.67 per diluted share.
Profitability remained strong, with a GAAP gross margin of 64.5% and non-GAAP gross margin of 68.0%. Credo also ended the quarter with $764.3 million in cash and short-term investments.
For the fiscal second quarter, Credo expects revenue of $525 million to $535 million. At the midpoint, that represents roughly 10.6% sequential growth from Q1. Non-GAAP gross margin is projected at 67%–69%, broadly around the 68% achieved in the latest quarter.
The negative share reaction may therefore reflect expectations rather than deterioration in the underlying business. Credo has become a major beneficiary of AI data-center spending through its high-speed connectivity products, and its strong prior growth has raised the bar for earnings and guidance. With revenue already more than doubling year over year, investors may have been looking for an even stronger acceleration in the Q2 outlook.
The contrast with Dell’s roughly 10% premarket surge is notable. Dell reported a $95 billion AI server backlog and raised its full-year revenue outlook by $25 billion, providing a major positive surprise. Credo continues to show exceptional AI-driven growth, but its guidance may not have delivered the same degree of upside needed to satisfy increasingly aggressive expectations for AI infrastructure stocks.
Credo Technology (NASDAQ: CRDO) shares fell about 7.8% in premarket trading Wednesday despite reporting strong fiscal first-quarter results, as investors appeared to focus on the pace of sequential growth and the company’s guidance relative to elevated expectations for AI infrastructure stocks.
First-quarter revenue reached $479.0 million, up 114.7% year over year and 9.6% sequentially. Non-GAAP net income surged 140% from a year earlier to $236.3 million, while non-GAAP diluted EPS reached $1.20. GAAP net income was $129.4 million, or $0.67 per diluted share.
Profitability remained strong, with a GAAP gross margin of 64.5% and non-GAAP gross margin of 68.0%. Credo also ended the quarter with $764.3 million in cash and short-term investments.
For the fiscal second quarter, Credo expects revenue of $525 million to $535 million. At the midpoint, that represents roughly 10.6% sequential growth from Q1. Non-GAAP gross margin is projected at 67%–69%, broadly around the 68% achieved in the latest quarter.
The negative share reaction may therefore reflect expectations rather than deterioration in the underlying business. Credo has become a major beneficiary of AI data-center spending through its high-speed connectivity products, and its strong prior growth has raised the bar for earnings and guidance. With revenue already more than doubling year over year, investors may have been looking for an even stronger acceleration in the Q2 outlook.
The contrast with Dell’s roughly 10% premarket surge is notable. Dell reported a $95 billion AI server backlog and raised its full-year revenue outlook by $25 billion, providing a major positive surprise. Credo continues to show exceptional AI-driven growth, but its guidance may not have delivered the same degree of upside needed to satisfy increasingly aggressive expectations for AI infrastructure stocks.
