Credo surges on AI-driven data center growth while Broadcom leverages scale and custom accelerators to power its semiconductor dominance.
CRDO ends FY25 with $431.3 million in cash. It expects FY26 revenues to top $800 million, fueled by AI-driven connectivity demand.
Credo Technology's 79% YTD surge is fueled by AI-driven demand, but premium valuation and hyperscaler risks cloud the near-term outlook.
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Credo Technology has delivered explosive growth, with strong revenue guidance for FY 2026, driven by AI and data center demand. Valuation is premium but justified by tangible revenues, profitability, and secular AI tailwinds, though not as robust as platform peers like Nvidia or Palantir. Current share price already prices in aggressive future growth, making fresh entries risky; execution and competitive risks remain significant.
Credo Technology's strong business momentum and revenue diversification support my continued bullish outlook, with the stock up nearly 90% since my last update. Q4 results beat expectations, with sales up 180% YoY and customer concentration risk meaningfully reduced as more hyperscalers contribute to revenue. FY2026 guidance points to >85% YoY sales growth and ~40% net margin, with product and software innovation driving further upside potential.
Credo Technology Group Holding Ltd. CRDO and Astera Labs, Inc ALAB are companies that specialize in high-speed connectivity solutions essential for AI and data center infrastructure.
Credo's PCIe Retimers gain traction in AI clusters, with design wins, demos and 85% total revenue growth expected in FY26.
CRDO, JBL, and LITE have each surged over 10% in a month, riding the booming AI infrastructure demand and bullish growth outlook.
CRDO's AEC segment delivered double-digit growth in the fourth quarter as data-center demand drives broader product adoption.
DELL, JBL and CRDO see strong earnings estimate upgrades as AI demand fuels growth across servers, cables, and data centers.
Credo's revenue and EPS growth are impressive, with margins expanding and Q1 guidance pointing to even stronger results ahead. Management is actively diversifying the customer base, reducing Amazon dependency and mitigating key business risks. Despite a high P/S ratio, I believe Credo's exceptional growth and industry leadership justify the premium valuation.