Credo Technology Stock Edges Down Despite Powerful Artificial Intelligence (AI)-Driven Revenue and Earnings Growth
The rapid buildout of AI-enabled data centers is driving strong demand for the company's high-speed connectivity solutions.
Shares of Credo Technology (NASDAQ: CRDO), which makes high-speed connectivity solutions for data centers, declined 2.9% in Tuesday's after-hours trading, following the company's release of its report for the third quarter of its fiscal year 2025 (ended Feb. 1).
Credo's report was very strong with the quarter's revenue and earnings along with third-quarter revenue guidance all crushing Wall Street's estimates. The initial market reaction was positive, with Credo stock popping about 11% within about five minutes after the report was released. However, shares quickly gave back that gain and moved lower throughout the after-hours trading session, which ends at 8 p.m. ET.
Why did the stock decline? It seems safe to assume that traders quickly took some profits off the table because of the extreme volatility of the current market. Major U.S. stock indexes declined notably on Monday and Tuesday due to the Trump administration's tariffs enacted on Tuesday on imports from Canada, Mexico, and China. Canada and China immediately responded with retaliatory tariffs, with Mexico's response expected on Sunday.
