Credo and Sandisk Deliver Record Profits Amid AI Demand

Credo Technology Group reported fiscal 2026 revenue of nearly $1.3 billion, a 205.7% increase over the prior year. The company generated net income of approximately $472.3 million, up from $52.2 million in the previous period. This performance was driven by high-speed connectivity solutions used in data centers.

Sandisk recorded fiscal 2026 revenue of close to $20.2 billion, reflecting a 175.3% growth rate. The company reported net income of nearly $11.4 billion, reversing a net loss of $1.6 billion from the prior fiscal year. These figures highlight the scale difference between the two hardware manufacturers.

Financial Health and Cash Generation

As of May 2026, Credo maintained a debt-to-equity ratio of 0.0x and a current ratio of 10.2x. Free cash flow reached $407.0 million, though stock-based compensation accounted for 39.3% of operating cash flow. According to data from GN stocks/chips, this non-cash expense inflates reported cash generation metrics.

Sandisk also reported a 0.0x debt-to-equity ratio as of July 2026, with a current ratio of 2.3x. Its free cash flow was approximately $11.5 billion. Stock-based compensation represented only about 2% of cash flow from operations, indicating higher quality in cash generation compared to Credo.

Customer Concentration and Supply Chain Risks

Credo faces significant customer concentration risk, with 90% of its fiscal 2026 revenue derived from its top 10 clients. The company relies exclusively on Taiwan Semiconductor Manufacturing Company for chip manufacturing. Geopolitical tensions involving Taiwan could disrupt its entire supply chain.

Sandisk depends on joint ventures with Kioxia for its entire supply of flash memory. The NAND flash industry is highly cyclical, meaning storage prices can drop rapidly when supply exceeds demand. The company competes with global giants in a market prone to volatility.