Portfolio: Zacks Top 10

We previously highlighted Credo as the Buy of the Week on June 16 when it was under $80. Today, the stock has doubled to above $160, and we continue to believe in the story unfolding there.

Credo Technology represents a compelling investment opportunity positioned at the intersection of two major secular growth trends: artificial intelligence infrastructure expansion and the transition to higher-speed data center interconnects. The company has established itself as a critical enabler of AI data center architecture through its high-speed connectivity solutions. Credo makes the cables and chips that connect computers and data centers together at super-high speeds. Think of them like the company that builds the super-fast highways that allow massive amounts of data to travel between servers in places like Amazon’s cloud or Microsoft’s data centers. Their main products are special copper cables called Active Electrical Cables (AECs) and computer chips called SerDes that help data move at speeds of 400 gigabits per second or faster. They’re especially important for artificial intelligence systems that need to move huge amounts of information very quickly between thousands of powerful computer processors.

Zacks expects 60% revenue growth to $962 million in 2026 and the company demonstrating exceptional execution with 274% year-over-year revenue growth in fiscal Q1 2026 to $223.1 million, Credo is capitalizing on the massive infrastructure buildout required to support AI workloads. The global AI data center market is expected to grow at a 28.3% CAGR through 2030, reaching $933.76 billion, while the SerDes market specifically is projected to expand at 14.2% CAGR to $2.4 billion by 2032. Credo’s technical differentiation makes us bullish on the sustainability of its impressive growth over the next five years.

Key Upside Catalysts:

• Accelerating adoption of 800G and 1.6T interconnects driven by larger AI model training requirements
• Successful customer diversification reducing dependency on Amazon while maintaining strong hyperscaler relationships

Primary Risk Factors:

• Extreme valuation multiples leave little room for execution missteps or market slowdowns
• High customer concentration despite diversification efforts creates earnings volatility risk from single customer decisions