Credo Technology Q3: Don't Blame Its Hyperscaler Concentration, Embrace It
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Credo Technology reported strong Q3 earnings, surpassing expectations and raising Q4 revenue guidance. The company benefits from robust AEC product shipments and an expanding hyperscaler customer base, with 86% of Q3 revenues from Amazon's AWS. Despite concentration risk, AWS's investment in Credo and potential supplier diversification mitigate concerns. Credo is considered undervalued with a forward valuation of 37x FY26 EBITDA.
March 09, 2025 | 9:30 am
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POSITIVE IMPACT
Credo Technology's strong Q3 earnings and raised Q4 guidance highlight its growth potential. Despite high revenue concentration from AWS, risks are mitigated by AWS's investment and potential diversification. Credo is undervalued with a promising forward valuation.
Credo Technology's strong earnings report and raised guidance indicate positive short-term performance. The high concentration of revenue from AWS is a risk, but AWS's investment in Credo and potential diversification reduce this concern. The company's undervaluation and growth prospects further support a positive outlook.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100