Credo Technology (CRDO) surged over 16% in premarket trading Tuesday after Wall Street analysts applauded the company’s stronger-than-expected earnings and an increasingly bullish outlook. The high-speed connectivity provider is riding a much bigger boom in the active electrical cables (AEC) market than previously anticipated.

Broader AI Hardware Stocks Move Higher

Other AI-linked names such as Celestica (CLS) and Astera Labs (ALAB) also traded higher in sympathy as investor sentiment improved across the AI hardware and connectivity space.

Analyst Reactions Strengthen the Bullish Case

Needham: Revenue Strength, Customer Diversification, and New Growth Pillars

Needham analyst N. Quinn Bolton reiterated a Buy rating and raised his price target to $220 from $190, highlighting:

F3Q26 revenue guidance at $340M, significantly above expectations.
FY27 revenue estimate raised from $1.25B to $1.60B.
Revenue diversification with four customers contributing >10% in F2Q26 (42%, 24%, 16%, 11%).
A fifth major customer ramping and expected to surpass 10% contribution longer-term.
Three new growth pillars expanding Credo’s TAM:
- ZeroFlap Optics
- Active Linear Cables (ALCs)
- OmniConnect Gearboxes

These initiatives significantly enlarge Credo’s long-term addressable market beyond AECs.

J.P. Morgan: Larger TAM and Multi-Year Growth Visibility

J.P. Morgan analyst Joseph Cardoso reiterated an Overweight rating and boosted his price target to $230 from $165. Key points included:

Strong and diversifying AEC momentum driving growth through FY27.
Additional upside opportunities:
- Growing Optical DSP revenue
- “Meaningful” PCIe revenue expected in FY27
- “Initial” optical transceiver revenue in FY27
- Early ALC and OmniConnect gearbox revenue expected in FY28
Total addressable market now estimated at $10B+, more than 3× larger than 18 months ago.

Cardoso said the combination of strong momentum and expanding TAM boosts confidence in a durable multi-year growth trajectory.

More Firms Join the Bullish Wave

Several other firms — including Susquehanna, Mizuho Securities, and Stifel — also raised their price targets following the upbeat results and guidance.