Intel’s (INTC) newly appointed CEO, Lip-Bu Tan, has been systematically offloading his position in Credo Technology (CRDO), raising eyebrows amid Wall Street’s bullish sentiment on the semiconductor stock. Over a span of just two weeks in June, Tan executed four major sell orders totaling more than $26.5 million worth of shares.
The selling spree began June 5 with 75,000 shares sold at $75.20 each, followed by another roughly 103,000 shares on June 12 between $75.33 and $76.05 per share. Tan’s largest transaction occurred on June 16, when he dumped 171,473 shares an average of roughly $77.80 each.
His final reported transaction occurred June 18, when he sold 54,297 shares at an average price of $86.24.
Despite Tan’s apparent lack of confidence in the stock, Wall Street analysts maintain a different perspective. Out of the 10 analysts covering CRDO stock, nine recommend “Strong Buy” and one recommends “Moderate Buy.” The average target price for the tech stock is $81.50, below the current trading price.
Credo Technology delivered solid financial results in its fiscal Q4 (ended in April), posting record revenue of $170 million, a 26% sequential increase and a remarkable 180% year-over-year growth.
The connectivity solutions specialist’s full fiscal year 2025 revenue reached $437 million, representing a 126% increase from the prior year. This stellar growth showcased Credo’s ability to capitalize on surging demand for high-performance data transmission solutions in AI infrastructure deployments.
The semiconductor company’s success stems from its diversified product portfolio, which spans active electrical cables, optical solutions, and retimers that serve critical applications in Ethernet, PCIe, and emerging AI networks.
Active electrical cables have become the industry standard for intra-rack connectivity, with three hyperscalers each contributing over 10% of Credo’s AEC revenue in the fourth quarter. CEO Bill Brennan emphasized that AECs are gaining traction as rack-to-rack solutions for distances up to 7 meters, offering superior reliability compared to laser-based optical modules.
Credo’s optical business achieved significant momentum with a major 800 Gbps DSP win from a U.S. hyperscaler, showcasing the company’s industry-leading power efficiency capabilities. At the recent OFC conference, Credo demonstrated an industry-first 800-gig optical module consuming roughly 9 watts, powered by its Lark LRO DSP technology. It also unveiled its 3-nanometer 200-gig-per-lane optical DSP, supporting port speeds of up to 1.6 terabits per second.
Credo’s economies of scale are driving impressive margin improvements, with Q4 adjusted margins reaching 67.4%, up 354 basis points sequentially.
Looking ahead, Credo projects fiscal 2026 revenue exceeding $800 million, representing over 85% year-over-year growth, while expecting non-GAAP net margins to approach 40%.
Management plans to further diversify its customer base, with two new hyperscale customers expected to ramp up in the second half of fiscal 2026, thereby reinforcing Credo’s position in the rapidly expanding AI infrastructure market, where copper connectivity solutions are becoming increasingly critical for power efficiency and reliability.
Investors might be worried about Credo’s decelerating growth estimates. Wall Street forecasts Credo to increase sales by 84% year over year to $804 million in fiscal 2026 and by 22.6% to $985.6 million in fiscal 2027.
During this period, adjusted earnings are expected to increase from $0.70 per share to $1.91 per share. So, priced at 15x forward sales and 45x forward earnings, CRDO stock trades at a premium in June 2025.
The disconnect between Tan’s selling activity and analyst recommendations highlights the complex dynamics facing semiconductor companies as they navigate volatile market conditions and shifting technology demands in a competitive landscape.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com