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Sitting at the center of the AI data center boom, Credo (CRDO) and Vertiv (VRT) are two intriguing tech stocks to consider at the moment.
Credo Technologies is a leading supplier of active electrical cables for AI data centers, posting 201% YoY revenue growth in Q3. Despite a recent 20% stock selloff on decelerating growth guidance (~50% YoY in FY27), I view the dip as a major buying opportunity. CRDO boasts nearly 70% gross margins, a debt-free balance sheet, and new products targeting a $10 billion+ TAM, supporting robust long-term growth.
AI data center boom lifts both Credo and Marvell, but divergent growth rates, valuations and strategies reveal distinct risk-reward profiles for investors.
Credo Technology Group is rated Strong Buy, with 113% upside projected and a 3-year CAGR of 28.5%. CRDO's Q3 2026 results showed 201% YoY revenue growth, 405% YoY EPS growth, and EBIT margin expansion to 37%. Demand from hyperscalers like Amazon and Microsoft is accelerating, driven by CRDO's AECs, which offer superior power efficiency, reliability, and cost benefits.
Credo delivered $407M revenue (+200% YoY), ~68.6% gross margins, and ~50% operating margins despite a sharp stock pullback. Stock declined ~21% due to margin guidance compression to mid-60s, not weakening demand or fundamentals. Hyperscaler demand remains strong with top customers growing sequentially and new wins supporting sustained growth into FY2027.
Strong earnings forecasts have supported share prices despite market volatility from geopolitical tensions, interest rate uncertainties, and sticky inflation. S&P 500 earnings are expected to grow by double digits for the sixth straight quarter in Q1 2026, led by AI-fueled tech sector stocks. Recent market volatility has hit a wide range of stocks, including companies with strong fundamentals and solid earnings outlooks.
Credo Technology is upgraded to 'buy' as AI-driven demand for connectivity solutions accelerates and structural bottlenecks persist. CRDO's revenue grew over 200% YoY for three quarters, with EPS up 328% last quarter, driving aggressive margin expansion and operating leverage. Forward P/E compression is pronounced; FY2027 P/E of 21.5 appears modest given robust growth and a $1.3B net cash balance.
Fiber optics concern and semiconductor supplier Credo Technology Group Holding Ltd (NASDAQ:CRDO) is down 1.8% to trade at $102.20 today.
CRDO rolls out 800G ZeroFlap transceivers and new DSP families, targeting faster, more stable AI data center networks with enhanced monitoring.
Credo Technology Group Holding Ltd. (NASDAQ: CRDO - Get Free Report) CTO Chi Fung Cheng sold 27,500 shares of the company's stock in a transaction that occurred on Wednesday, March 11th. The shares were sold at an average price of $117.60, for a total value of $3,234,000.00. Following the completion of the transaction, the chief technology
Alliancebernstein L.P. cut its position in Credo Technology Group Holding Ltd. (NASDAQ: CRDO) by 38.3% in the undefined quarter, according to its most recent disclosure with the Securities and Exchange Commission. The firm owned 1,891,065 shares of the company's stock after selling 1,173,826 shares during the quarter. Alliancebernstein L.P. owned 1.09% of Credo