Shares of Credo Technology Group (NASDAQ:CRDO) advanced 3.5% on Monday following the publication of a new analyst note from Evercore ISI. Analyst Mark Lipacis initiated coverage with an Outperform rating and set a $325 price target.
Evercore highlighted that the $325 target - measured against the stock’s recent Friday close at $271.83 - represents roughly a 20% premium over its current record-high trading levels, a gap that helped lift the shares on Monday morning.
Evercore’s core thesis
In the research note, Lipacis argued that Wall Street has been viewing Credo mainly through the lens of copper-based AEC systems, since the company established a dominant full-system approach - selling complete hardware solutions that pair the cable assembly with the silicon rather than offering chips alone. Evercore contends that this framing is too narrow and that a re-rating is coming as Credo deploys its optical product roadmap.
“We believe it will be increasingly viewed as a broad copper + optical AI-connectivity play,” the note said.
The firm points to Credo’s plans to roll out optical DSPs, Silicon Photonics and its ZFOptics modules, applying the company’s full-system sales strategy to optical components as well as copper. Evercore estimates that this shift could expand Credo’s addressable market by a factor of 10x to 20x.
Forecasts and modeling
Evercore’s financial modeling projects a pronounced near-term lift in Credo’s copper AEC business, calling for 100% growth in 2026 for core AEC copper solutions and an additional 60% increase in 2027. The research note also anticipates an optical inflection that accelerates late next year, with the new optical portfolio potentially representing 25% of total revenues by 2027.
On earnings, Lipacis projects Credo will deliver more than $13 in earnings per share by 2028. Evercore notes that this implies a three-year compound annual earnings growth rate of over 70%, and that the 2028 EPS projection is roughly 40% higher than the consensus on the Street.
Discounting those 2028 forecasts back to present value, Evercore calculates that the $325 price target corresponds to a Price-to-Earnings-to-Growth (PEG) ratio of about 0.4x, a level the firm characterizes as inexpensive for a company positioned in the AI data center buildout.
Market reaction and positioning
Evercore’s initiation and the aggressive targets it lays out produced an immediate market response, with Credo shares rising on the morning following the note. The research note frames Credo as a company that has the potential to expand beyond a copper-centric identity into a broader copper-plus-optical vendor for AI connectivity.
What remains explicit in the note: Evercore’s outlook depends on Credo executing its optical roadmap and on the optical portfolio achieving the revenue mix and timing the firm models. Absent that execution, the re-rating the analyst describes would be at risk.