Credo Technology Group Holding Ltd (CRDO) experienced a pre-market plunge of 5.01% on Wednesday, following a series of analyst downgrades and a mixed outlook from the company's earnings call.

The semiconductor company reported record revenue of $135 million for the third quarter of fiscal 2025, driven by strong demand from its largest hyperscale customer. However, concerns emerged regarding the company's high customer concentration and the potential for an "air pocket" in future demand.

Multiple analysts lowered their price targets on Credo, citing the risks associated with the company's dependence on a single major customer. While Credo expects to diversify its customer base in the coming quarters, analysts expressed concerns about the timing and extent of this diversification.