CRDO stock is falling due to margin compression and high valuation despite revenue growth.

How about we have Credo Technology? That one's down. >> Yeah, that one is also down despite an earnings beat here and this is another one where expectations were higher going into its results.

So the bar is high especially about connectivity. This is a part of the picks and shovels story here. So, Credo shares down 11 12% right now. Um, again, investors were just looking for more.

And then there's also the question about uh margins here.

So, the in terms of revenue, revenue actually jumped more than 100% from a year ago to 479 million. That's the beat. Adjusted earnings per share coming in at buck 20. That was also a beat here.

But investors focus on the shrinking margins, rising expenses, and then the already rich valuation coming into its results.

Credo's behind those high-speed connectivity products used inside the AI data centers. So they help the processors, the memory, the networking equipment move the enormous amounts of data that we've been watching.

They include like the electrical cables, optical uh transceivers and you know other components that help move all the massive data um that we talk about with regard to the proliferation of the AI story here.

Um again the biggest negative negativity was margin. That's one of the things that investors focus on. Gross margin gap gross margin fell to 64.5% to put that in perspective. That's down from 68.2% in the previous quarter. also down from a year ago.

So that's a concern. So it's while it's generating more revenue, um it's keeping a smaller percentage of the sales dollars from that as profit. Uh so hence the pressure we're seeing.