Credo Technology and Symbotic have been highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – September 10, 2025 – Zacks Equity Research shares Credo Technology Group CRDO as the Bull of the Day and Symbotic SYM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Stride, Inc. LRN, Coursera, Inc. COUR and Strategic Education, Inc. STRA.

Here is a synopsis of all five stocks:

Bull of the Day:

I last wrote about Credo Technology Group as the Bull of the Day in early May when shares were trading under $50. Two beat-and-raise earnings reports later, the stock has more than tripled.

Credo Technology is a key supplier of high-performance serial connectivity solutions for the hyperscale datacenter, 5G carrier, enterprise networking, HPC (high-performance computing), and AI/ML markets.

Here's what I wrote on May 5...

With sales growing 120% this fiscal year to $425 million, one of Credo's high demand products is their line of Active Electrical Cables (AEC) which provide high-speed connectivity solutions to data centers and enterprises with heavy AI and cloud computing needs.

Credo also makes Digital Signal Processing (DSP) chipsets to facilitate high-bandwidth data transfer with low energy usage.

Credo's largest and most strategic customers are leading hyper-scalers like Microsoft and Amazon who use Credo's AECs to support AI and cloud infrastructure.

And its biggest competition comes from Broadcom and Marvell in connectivity solutions for the AI Economy.

(end of May 5 article excerpt)

I also mentioned that there was concern about Credo's dependence on Amazon (AMZN) as the single large customer who helped them deliver a whopping January quarter (Q3FY'25) beats of 38% on EPS and 12.5% on the topline.

Another Monster Beat-and-Raise Quarter

Fast forward to their July quarter (Q1FY'26) and all that "FUD" is gone as this year is projected to see sales grow another 120% annually to cross $960 billion.

On September 3 Credo reported Q1 fiscal 2026 adjusted EPS of 52-cents, which crushed the Zacks Consensus Estimate by 48.6%. Revenues surged 273.6% year-over-year to $223.1 million, blowing through estimates by 17.4%.

Based on company guidance, not only was the revenue outlook significantly boosted but the bottom line consensus jumped nearly 35% from $1.48 to $2.00 EPS, representing 185% growth.

Credo's growth has been propelled by strong, strategic partnerships with hyperscalers and other key customers. With rising market demand for reliable, power-efficient connectivity solutions, the company anticipates sustained revenue growth along with broader diversification across customers, protocols and applications.

In the first quarter, each of the company's top three customers contributed more than 10% to revenues. Credo expects its customer base to continue expanding over the coming quarters, and based on customer forecasts, it anticipates strong year-over-year growth.

NVIDIA is the AI Market Maker

As I've said for almost eight years, Jensen & Co. have been creating new industries we didn't even know we needed. Once modern data enterprises and research universities caught on to what GPU-CUDA "massively parallel architectures" could do for them, they literally created new uses cases by the thousands per year.

When you can simulate anything, use synthetic data to do so, and then run billions of iterations on your experimental idea in a matter of hours, innovation happens much faster. This is critical for training and inference in self-driving cars and humanoid robots where human safety is always at risk.

Thus Jensen talks about 1,000-fold advances in science, engineering, and social challenges. And then you understand why NVIDIA power tools are in such demand for the Global 2000 corporations, plus universities, plus nation-states who need to secure and "mine & model" their own data.

The Credo connection is that Jensen still loves copper for GPU connections in densely-packed rack-scale AI servers.

What Makes Credo's AECs More Efficient Than Other Cables?

Credo's Active Electrical Cables (AECs) stand out for their efficiency and performance in modern data center environments, especially compared to traditional Direct Attached Copper (DAC) and Active Optical Cables (AOC). Here are the key factors:

1. Substantial Power Savings

Credo's AECs consume about 50% less power than traditional DACs and significantly less than AOCs, making them highly energy efficient.

For example, their second-generation HiWire LP SPAN AECs reduce power consumption by nearly half while increasing cable reach by 40% compared to the previous generation.

2. Thinner, More Flexible Cables

Credo's AECs use thinner copper (as slim as Cat 6 cables), reducing cabling volume by up to 75% compared to passive DACs. This makes them easier to route and manage in dense data center environments.

The thinner, lighter cables also support longer distances and tighter bend radii, which is critical for modern rack-to-rack and server-to-switch connections.

3. Superior Performance and Reliability

Integrated digital signal processors (DSPs) and retimers in Credo's AECs deliver better signal integrity, enabling higher data rates (up to 800G and 1.6T) over longer distances without degradation.

These cables offer extreme reliability, with Mean Time Between Failure (MTBF) ratings up to 100 million hours, minimizing downtime and maintenance.

4. Plug-and-Play Simplicity

Credo's AECs are hot-swappable and easy to deploy, providing a drop-in replacement for AOCs and DACs without the need for additional components or complex configuration.

They also support advanced features like dual Top-of-Rack (TOR) redundancy for enhanced reliability in hyperscale data centers.

5. Lower Environmental Impact

By reducing power consumption and using less plastic and copper, Credo's AECs help customers decrease their environmental footprint.

Sheraz Mian and Zacks Top 10 Picks

Zacks Director of Research Sheraz Mian made CRDO one of his Top 10 Picks for this year. While the stock was off to a rough start for Q1, CRDO is now one of his best performers with a triple-digit return.

And his description of their business in January (when the Top 10 portfolio is launched anew every year) was exceptional so I want to share it for your own due diligence...

Credo aims to break bandwidth barriers in the data infrastructure market. It provides secure, high-speed connectivity solutions that deliver improved power efficiency as data rates and corresponding bandwidth requirements increase exponentially throughout the data infrastructure market.

Specifically, Credo's SerDes and DSP chips optimize data transfer by enabling high-speed, error-free communication within data centers, while its HiWire Active Electrical Cables (AECs) provide efficient, high-bandwidth connections between servers to support AI workloads and large-scale data processing.

Many important trends are driving the data infrastructure market, such as cloud workloads, streaming video, 5G wireless deployment, the expansion of Internet of Things (IoT), and, most notably, the growing adoption of artificial intelligence. These trends have all created an explosion of data that has stressed existing infrastructure and forced a major shift.

(end of Sheraz Mian observations)

The rapid adoption of AI and the need for efficient data center connectivity are driving increased demand for Credo's products among top-tier builders of the AI Economy.

Credo is expanding its customer base to include all the major technology firms -- from Apple to Tesla -- and multiple large enterprises in energy and education in the midst.

Bottom line on CRDO: If Sheraz hadn't put Credo on my radar, I might not have studied it enough. As it happens, I missed my shot under $50 as I was too distracted by the tariff tantrums. And the stock is now very richly valued at 25X sales. But I would look for pullbacks to $125 to enter.

Bear of the Day:

Symbotic is a $28 billion provider of advanced robotics for warehouses. The company considers itself the "Backbone of Commerce."

I was a big fan $13 billion lower in February, but we got flushed out by the tariff tantrums. Here's what I wrote to my TAZR Trader group on 2/10/25...

Buying Symbotic (SYM)

TAZR Traders

Portfolio is buying Symbotic (SYM), a $15 billion provider of advanced robotics for warehouses.

Shares have suffered a few recent downgrades from Goldman and RayJay, but I believe they offer decent GARP near $25 and 5X sales growing over 24%. We'll start with a 6-7% position and go from there.

With its A.I.-powered robotic technology platform, Symbotic is changing the way consumer goods move through the supply chain. Intelligent software orchestrates advanced robots in a high-density, end-to-end system – reinventing warehouse automation for increased efficiency, speed and flexibility.

Symbotic is growing the topline by 22.6% to $2.3 billion in the current fiscal year (ends Sep). And next year is projected to see a 26% advance to nearly $2.9 billion.

Meanwhile, the bottom line is suddenly soaring with a big flip to profitability this year and a +235% projected launch to 44-cents EPS next year.

(end of Feb buy note)

After a nearly 300% rally off of the April lows (due to a price spike to $64 on Aug 5), SYM is now in the cellar of the Zacks Rank as growth is not catching up.

Following a big EPS miss last month, analysts have taken down next year's consensus over 20% from 51-cents to 40-cents. Fiscal year 2026 begins in October.

On August 6, Symbotic came out with a quarterly loss of 5-cent per share versus the Zacks Consensus Estimate of a 4-cent profit. This compared to a loss of 2-cents per share a year ago.

This quarterly report represents an earnings surprise of -225.00%, and it's basically deja-vu all over again as a quarter ago it was expected that SYM would post earnings of $0.05 per share when it actually produced a loss of $0.04, delivering a surprise of -180%.

Symbotic is still expected to close out this fiscal year (ends Sep) with the big 400% swing to profitability from last year's loss of 8-cents to a profit of $0.24.

What About the 20% Revenue Growth?

Symbotic, which belongs to the Zacks Technology Services industry, posted revenues of $592.12 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 10.55%.

This compares to year-ago revenues of $491.86 million. The company has topped consensus revenue estimates three times over the last four quarters.

That revenue growth is terrific, but now at over 10X next year's topline forecast, some investors will be cautious. To explore the dynamics deeper, I recommend this article from Zacks Research last week...

Bottom line: Robotics are already dominating factories and warehouses and their proliferation will only persist. Keep SYM on a watch list if it falls back further and watch the Zacks Rank to let you know when the profit picture turns up.

Additional content:

Can Stride Maintain 20% Subscriber Growth into FY26?

Stride, Inc. ended fiscal 2025 with an average enrollment growth of 20.4% year over year, with the General Education segment's enrollment going up 13.2% and the same for the Career Learning segment increasing 32.5%. Amid market risks, the company is witnessing meaningful gains from the shift in demand patterns among students and parents toward tech-based alternatives and career-focused programs.

Based on the market's demand trends, LRN is mainly focusing on making meaningful investments across all its programs, especially on the career platform. Moreover, due to the increased consideration of AI or AI-based tools, the company is also gradually incorporating AI in its programs in a responsible and impactful manner. Its main focus is on the foundational areas and technologies that it can leverage for better customer outcomes and experiences.

Besides incorporating AI, Stride is making meaningful gains in tutoring services, which have been gaining traction since fiscal 2025. Through its K12 Tutoring service portfolio, the company offers personalized online tutoring services to school students, providing them with an additional boost toward academic gains. It has further investments planned for this platform over the next few years, aiming to offer better teacher tools and tutor experiences to students.

Moving into fiscal 2026, Stride highlighted its intention to continue investing in its products and services amid a fairly positive funding environment. Moreover, due to the favorable demand trends for its services, LRN expects enrollment growth of between 10% and 15% year over year for the first quarter of fiscal 2026, positioning it well for fiscal 2026 and beyond.

Stride's Competition in the Education Market

Stride faces a dynamic competitive landscape as it expands its reach in online education, particularly against Coursera, Inc. and Strategic Education, Inc..

Coursera's model offers flexibility and global recognition, but Stride's ability to integrate tutoring and support services across its portfolio has provided stickier enrollment growth, especially in career-oriented pathways. On the other hand, Strategic Education, with its established presence through Capella and Strayer, competes closely with Stride on adult learners, focusing on affordability and workforce-aligned programs.

Coursera has been at the forefront with AI-powered personalized recommendations and enterprise-level integrations, while Strategic Education is embedding AI into student advising and skill assessments. Stride, meanwhile, is differentiating itself by deploying AI not just for learning personalization but also for tutoring and administrative automation, which could enhance scalability.

LRN Stock's Price Performance & Valuation Trend

Shares of this Virginia-based education company have trended upward 58.3% year to date, outperforming the Zacks Schools industry, the broader Zacks Consumer Discretionary sector and the S&P 500 index.

LRN stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 18.85, as shown in the chart below. The stock's overvaluation compared with its industry peers indicates its strong potential in the market, given the favorable trends supporting it.

Earnings Estimate Revision of LRN

LRN's earnings estimates for fiscal 2026 have moved north over the past 30 days to $8.58 per share. The revised estimated figure for fiscal 2026 implies year-over-year growth of 5.9%.

LRN stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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