Why Credo Technology Stock Skyrocketed 245% in 2024

Shares of Credo Technology (NASDAQ: CRDO), 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.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

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.

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.

Should you invest $1,000 in Credo Technology Group right now?

Before you buy stock in Credo Technology Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Credo Technology Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $816,504!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of January 13, 2025

Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.