Credo Technology (CRDO) Reports Strong Q2 Earnings, Positive Q3 Guidance

by MarketNewsData
  • Ticker: CRDO
  • Event: Q2 FY26 earnings (reported Nov 2025)
  • Theme: High-growth AI / data-center connectivity name, now inflecting to strong profitability.

πŸ“Š Earnings Snapshot – Q2 FY26

Headline Numbers

  • Revenue: β‰ˆ $268M
    • QoQ: ~+20%
    • YoY: ~+272%
  • Gross Margin:
    • GAAP: ~67.5%
    • Non-GAAP: ~67.7%
  • Operating Income:
    • GAAP: β‰ˆ $78.8M (29% margin)
    • Non-GAAP: β‰ˆ $124M (46% margin)
  • Net Income / EPS:
    • GAAP: β‰ˆ $82.6M / $0.44
    • Non-GAAP: β‰ˆ $127.8M / $0.67

Balance Sheet

  • Cash & ST investments: β‰ˆ $814M
  • Total assets: β‰ˆ $1.45B
  • Total liabilities: β‰ˆ $163M
  • Net cash, no real debt risk.

Business Drivers (from 8-K language)

  • Growth driven by AI training & inference clusters.
  • Strong ramps in AEC, IC, ZeroFlap Optics, ALCs, OmniConnect – all AI / hyperscale-linked.
  • Management commentary points to continued strong growth through FY26 and beyond.

Key Positives

  • Hyper-growth + high margins (rare combo).
  • Turned from GAAP loss a year ago to strong GAAP profitability.
  • Very asset-light with a cash-rich balance sheet.

Key Watchpoints / Risks

  • Stock-based compensation is large (big gap between GAAP vs non-GAAP opex).
  • Guided gross margin for next quarter a few points lower (mid-60s) – mix/price or ramp costs.
  • Heavy AI cyclicality – if hyperscaler capex slows, growth could reset.

πŸ“… Guidance – Q3 FY26

  • Revenue: $335–345M (midpoint ~+27% QoQ).
  • GAAP gross margin: 63.8–65.8%
  • Non-GAAP gross margin: 64.0–66.0%
  • GAAP opex: $116–120M
  • Non-GAAP opex: $68–72M

Takeaway: Company is guiding to another big step-up in revenue with still-strong margins β†’ supports a multi-quarter AI build-out thesis, not a one-off spike.

πŸ•’ Price & Trend Snapshot (Daily)

  • Pre-market (today): β‰ˆ $201
  • Prev. close: $171.13
  • Move: +~17% pre-market, on top of a prior strong run.
  • 50-day SMA: $152.51
  • 200-day SMA: $98.10

Trend View

  • Price is well above both the 50D and 200D; 50D > 200D β†’ strong, established uptrend.
  • The last two earnings each triggered higher trading ranges; this quarter’s beat + guide has pushed price through the prior ~$193–194 high into new territory.
  • Stock is now ~32% above the 50D β†’ extended in the short term.

πŸ“ˆ Momentum & Overbought Readings (from your Excel levels)

Based on your RSI/Stoch price mappings:

  • RSI price equivalents (14-period):
    • RSI 70: ~$210
    • RSI 50: ~$155
    • RSI 30: ~$79
  • Stochastic price equivalents:
    • 80%: ~$171.7
    • 70%: ~$165.7
    • 50%: ~$153.8
    • 30%: ~$141.8

At ~$201 pre-market:

  • Price is above Stoch 80% and approaching RSI-70 zone (~$210) β†’ strong / overbought momentum, but not yet at the extreme $210+ level from your mapping.

πŸ” Key Technical Levels (Short Term)

All levels from your technical sheet + charts.

Resistance / Upside

  • $193–194 – prior 52-wk / 13-wk high & old R3 zone.
  • $187–188 – prior R2 cluster.
  • $179–180 – prior R1 / volume shelf.
  • $210–215 – RSI-70 band; potential blow-off / extension target if a squeeze continues.

At β‰ˆ$201, CRDO is above all prior resistance and now trading between old highs ($193-194) and RSI-70 projection (~$210).

Support / Downside

  • Near-term β€œpost-gap” supports (for 1–3 day tactics):
    • $193–194 – first big reference; becoming new support if the breakout is real.
    • $187–188 – first pullback target if the open fails.
    • $179–180 – deeper intraday retrace; prior R1.
  • Stronger swing supports / β€œbuy-the-dip” zones:
    • $167–168 – above your S1 region / near recent swing structure.
    • $160 – around Β±1Οƒ support and mid-range retrace.
    • $155–153 – major confluence: 2–3Οƒ supports + Stoch 50% + very close to 50-day SMA
      • This is the key swing line in the sand; uptrend remains clean while price holds above this band.
  • Deeper levels (trend damage if reached quickly):
    • $145–142, $131, then low-$120s – only relevant if AI sentiment or market breaks.

🎯 Price Reaction vs Earnings

  • Earnings beat + strong guidance pushed it:
    • Close: to $171 with high volume.
    • Pre-market today: to ~$201, a massive re-rating and a clean breakout above all prior highs.
  • This move lines up with the fundamentals (huge growth + high margins), but short-term is now extended and exposed to profit-taking.

🧭 Post-Earnings Trading Framework

Not advice – a map to structure your own plan.

1–3 Day Tactical View

Bullish continuation (gap-and-go) bias if:

  • Stock holds above ~$193–195 after the first 30–60 mins.
  • Pullbacks to $193–195 or $187–188 are bought with strong demand and price stays above intraday VWAP.

In that case:

  • Upside focus: retest $201–205, then stretch to $210–215 (RSI-70 zone).
  • For aggressive longs, invalidation is a decisive break back below $187–188 with heavy selling.

Fade / mean-reversion (gap-and-fade) bias if:

  • Early spike above $200–205 shows long upper wicks, fails to hold, and price slips back below $193–195 on strong volume.

In that case:

  • Short-side / hedge targets:
    • First: $187–188
    • Next: $179–180
    • Deep: $171 (full gap-fill back to prior close) if selling accelerates.
  • Invalidation: reclaiming and holding back above ~$200–205 after a breakdown.

Swing (multi-week) View

  • As long as price stays above the $155–153 / 50-day SMA cluster, the primary bull trend post-AI-earnings inflection remains intact.
  • A controlled pullback into that band after this spike would be normal digestion; a fast break below it, especially with fundamental/headline change, would suggest trend fatigue.

TL;DR Cheat Sheet

  • Fundamentals: Hyper-growth (>270% YoY) + mid-60s GM + 40%+ non-GAAP op margin + net cash.
  • Guidance: Another big QoQ step-up in Q3; management talking multi-quarter strength in AI.
  • Trend: Strong uptrend; price far above 50D and 200D; AI leader factor profile.
  • Current spot (~$201 pre-market): Above all prior highs, approaching overbought zone (~$210), very extended vs 50D.
  • Key levels:
    • Upside: $201, then $210–215.
    • Supports: $193–195 β†’ $187–188 β†’ $179–180 β†’ $155–153 (major).
  • Trade framing: Watch $193–195 as the decision zone for gap-and-go vs gap-and-fade over the next 1–3 sessions.

This is AI-assisted market analysis for informational and educational purposes only and is not a recommendation or advice to buy, sell, or trade any security.

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