Shares of Credo Technology Group nearly halved in value on Feb. 15 due to a drop in demand from its largest customer, which is believed to be Microsoft.
The company’s market valuation has plummeted by more than $1B.
- Credo is a provider of connectivity solutions and products for data center infrastructure.
- Cloud giants like Microsoft, Amazon Web Services (AWS), and Google are looking for ways to cut costs amid rising inflation, which has led to a drop in Credo’s client orders.
- The data center infrastructure supplier reported in an Oct. 2022 regulatory filing that 44% of its revenue came from its biggest client, which was unspecified but could be Microsoft, according to sources familiar with the matter.
- Five out of eight analysts cut the price target for Credo’s stock. The average price target fell to $13.88 from $18.75 at the end of January. Cowen and Co. reduced Credo’s price target by the most from $18 to $11.
