I don't know much about stucco other than it is porous and has to be able to drain. So I think your suspicion about the sidewalk is probably spot on. You're going to have to open up the wall. Perhaps a foot square opening in the drywall near the floor to inspect now. If that confirms water damage, then I would get that sidewalk ripped out ASAP, hopefully restoring the Drainage Plane, and get set for a major repair project this spring/ summer.

Your home is moving or settling, often caused by ground moisture, dry in the summer, wet in the winter There are countless videos/magazine/newspaper articles available on the internet. My home had cracking in 2-3 areas, I tried to fix them, I did not succeed. I had French drains installed and hired professional painters to patch and paint. I sold that property about 5 years later and the cracks had not reappeared. Maybe by keeping the soil around my home and using painters who had done it before helped. What was your process?

Jeremy, did you get a solution? I renovated a100 year old house 2 years ago. All the walls were plaster with suspected lead paint at some point- so skim coated all walls with Sheetrock mud... applying, drying, sanding,& re mudding till smooth. I then paid a licensed painter to paint. Instead of primer first, then paint he used a SW PRIMER Paint COMBO. This old house has brick exterior and plaster interior walls. Naturally the plaster moisture levels rise after heavy rains. Moisture reading goes up and down. Soooooo-what now? I read where high quality OIL PRIMER best for walls with some moistlure, but what to do about latex that is NOT ADHERING? I can’t really paint over it? Right?

The house is almost 100 years old, and I don’t know how best to answer some of those questions. My guess is that it has been painted many times, but this crack appears to go through all of the paint layers. As far as I can see/feel, there is no evidence of moisture. There is evidence that there has been some sort of previous damage to the wall before but in a different area.