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Key Takeaways CRDO and MRVL are key AI connectivity players benefiting from rising data-center demand.CRDO expects more than 80% fiscal 2027 revenue growth, led by AECs and a stronger optical ramp.MRVL raised fiscal 2027 revenue guidance to $11.5 billion as data center demand accelerates. The explosive AI-infrastructure buildout has put the spotlight on semiconductor companies as the reshaping of the data center connectivity landscape is creating massive demand for high-speed interconnect and optical solutions.

Both Credo Technology Group Holding Ltd (CRDO - Free Report) and Marvell Technology (MRVL - Free Report) are beneficiaries of this cycle. While both companies operate in the same space, their positioning, scale and strategies differ significantly.

So, the question now arises: Which stock is a better investment pick at present? Let us dive into the fundamentals, valuations, growth outlook and risks for each company.

The Case for CRDOCredo is a leading provider of high-speed connectivity solutions for AI infrastructure. At the core of Credo’s business is its Serializer/Deserializer (SerDes) and Digital Signal Processor (“DSP”) technology stack. Leveraging this foundation, Credo offers a diversified suite of solutions, including integrated circuits (ICs), retimers, optical DSPs, Active Electrical Cables (AECs), SerDes chiplets and SerDes IP licensing.

CRDO’s focus on high-performance, energy-efficient connectivity solutions gives it strategic relevance as hyperscalers and cloud service providers overhaul their network architectures.

Fiscal 2026 was a breakout year, with revenues surpassing $1.3 billion, more than tripling year over year. Non-GAAP net income increased more than fivefold. 

AECs are the primary growth engine for CRDO as they now play an increasingly critical role in AI-driven networking deployments. According to Credo, the adoption of zero-flap AECs is accelerating because they deliver up to 1,000x higher reliability while consuming roughly 50% less power compared with optical alternatives. These advantages are particularly valuable in large XPU clusters, where network failures can disrupt operations and lead to high costs. Beyond the traditional hyperscalers, Credo is also seeing increasing demand from emerging Neocloud providers.

In addition to AEC, CRDO is now focusing on the IC portfolio (retimers and DSPs). The company expects mid-single-digit sequential growth in the first half of fiscal 2027, followed by a stronger second-half acceleration buoyed by its optical portfolio. Management projects more than $600 million in optical revenues, with ZeroFlap optics, silicon photonics PICs and optical DSPs each contributing more than $100 million. This is expected to support more than 80% year-over-year revenue growth for the full year.

The acquisition of Dust Photonics strengthens Credo’s high-speed optical connectivity portfolio with silicon photonics PIC technology. The deal adds advanced technology, including 800G and 1.6T solutions, and would aid in developing upcoming 3.2T solutions.

As revenue scales, Credo is beginning to show signs of operating leverage. For fiscal 2027, gross margins are projected to stay in line with fiscal 2026 levels, while non-GAAP net margins are expected to remain around 50%, even as the company continues to invest in R&D.

However, no investment case is without risks. Macroeconomic uncertainties and exposure to the AI investment cycle amid increasing market competition remain concerns. On the last earnings call, Credo noted ongoing tightness in the supply chain. While the company has taken steps to secure capacity, disruptions could still affect its ability to meet demand.

The Case for MRVLMarvell Technology has been in the spotlight for some time now, especially after NVIDIA's chief publicly called it the next trillion-dollar company earlier this year. The company is now a component of the S&P 500 index. MRVL’s strategic pivot to prioritize the data center market is proving to be a successful catalyst amid surging AI-infrastructure spending.

The data center business accounted for 76% of total revenues in the first quarter of fiscal 2027. The company has raised its fiscal 2027 revenue forecast to $11.5 billion, with the upside coming from this business. Data center revenues increased 46% in fiscal 2026. Management expects growth to accelerate to approximately 50% in fiscal 2027 and 55% in fiscal 2028.

Interconnect remains a standout performer within the data center business. Demand for the company’s high-speed connectivity solutions remains strong, prompting management to raise its fiscal 2027 interconnect revenue growth forecast to more than 70% year over year. Demand remains strong for 800G products, while 1.6T solutions based on 200-gig-per-lane technology are ramping following their production launch in the second half of fiscal 2026. Marvell expects 1.6T revenues to increase substantially again in fiscal 2028.

Rapid growth in broadband analog products, including TIAs and drivers, bode well. Management projects revenues from TIAs and drivers to top a $1 billion annualized run rate over the next few quarters. Data center interconnect, or DCI, business represents another important growth opportunity. On the last earnings call, management highlighted that it now ships DCI solutions to all five major U.S. hyperscalers. It expects to gain from rising demand, driven by large-scale AI clusters that increasingly span several data centers.

Marvell has introduced secure 1.6T ZR and ZR+ DCI modules powered by its 2-nanometer coherent DSP, with sampling expected to begin this year. Management sees the DCI module business reaching a $1 billion annualized revenue run rate during fiscal 2028, nearly double the approximately $500 million generated in fiscal 2026.

MRVL is supplementing its organic growth with strategic acquisitions like Celestial AI and Xconn Technologies. Celestial AI specializes in the Photonic Fabric technology, or PF platform, while XConn Technologies will aid in expanding its footprint across PCIe and CXL switch opportunities.

However, Marvell Technology’s growth story comes with risks. Increasing reliance on the data center market makes it vulnerable to any changes in hyperscaler AI capital spending. Stiff competition in the semiconductor space and global trade tensions remain a matter of concern. Marvell expects to make $1 billion in supplier prepayments during fiscal 2027 to capture manufacturing capacity. Although these prepayments are intended to support future material purchases, these could impact cash generation if demand or production fall short of expectations. Apart from significant upfront investments, acquisitions bring along execution and integration risks.

Price Performance & Valuations of CRDO & MRVLYear to date, both CRDO and MRVL are up 55.6% and 144.7%, respectively.

Image Source: Zacks Investment Research

In terms of the forward 12-month price/sales multiple, Credo is trading at 16.06X, higher than MRVL’s 13.05X.

Image Source: Zacks Investment Research

How Do the Consensus Estimates Compare for CRDO & MRVL?Analysts have significantly revised their earnings estimates upwards for CRDO for the current fiscal year in the past 60 days.

Image Source: Zacks Investment Research

Estimates have been revised 6% upwards for MRVL’s bottom line.

Image Source: Zacks Investment Research

CRDO or MRVL: Which Is a Better Pick?

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SummaryCredo Technology is finally upgraded to Buy after a sharp 40% pullback, with its valuation now more attractive near a 30x forward earnings multiple.CRDO’s earnings profile has improved dramatically, with forward EPS estimates rising nearly 300% year-over-year, driven by AI infrastructure and optical platform growth. The best is yet to be.Competitive risks from Broadcom and Marvell persist, but hyperscaler CapEx, Meta’s AI ambitions, and SpaceX-linked opportunities underpin robust medium-term revenue prospects.The optical networking value chain could become a more massive growth driver in the next couple of years, helping to sustain another incredible run.Despite recent profit-taking and sector concerns, CRDO’s price action remains constructive, with $140 as a key support level for bullish momentum. Time to double down.Looking for a helping hand in the market? Members of Ultimate Growth Investing get exclusive ideas and guidance to navigate any climate. Learn More » J Studios/DigitalVision via Getty Images

Credo: Hammered Hard Recently A 40% drop in the shares of Credo Technology (CRDO) probably took the wind out of investors who never thought such a pullback could actually come into fruition so

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I may initiate a position in CRDO in the next 72 hours.

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I keep hitting the “Buy” button on Credo Technology Group (NASDAQ:CRDO | CRDO Price Prediction) because I have not found another pure-play way to own the wiring of the AI data center at this scale. Every rack of GPUs a hyperscaler stands up needs high-speed connectivity that does not drop links, does not burn extra watts, and does not require the whole cluster to be babysat. Credo sells exactly that, and the fiscal 2026 numbers tell me the buyers are ordering with both hands.

The Thesis in Plain English Credo makes Active Electrical Cables, retimers, optical DSPs, SerDes chiplets and memory connectivity for AI clusters, supporting port speeds up to 1.6 terabits per second. Fabless, vertically integrated and now printing hyperscaler-grade margins.

CEO Bill Brennan put it cleanly on the Q4 call: “Fiscal 2026 marked another defining year for Credo. For the year, revenue more than tripled to $1.3 billion, and non-GAAP net income increased more than five times to $662 million.” That is the catalyst itself, already in motion.

Three Reasons the Conviction Holds First, the growth is real and compounding. Q4 FY2026 revenue landed at $437.00M, up 157.0% YoY, and full-year revenue came in at $1.335 billion, up 205.7% YoY. Credo has beaten EPS estimates in four consecutive quarters, with the most recent beat at 12.17%.

Second, the margin profile. Non-GAAP gross margin in Q4 was 68.3%, non-GAAP operating margin hit 49.6%, and net income margin reached 51.9%. Operating income grew 361.2% YoY on 157% revenue growth. That is operating leverage most semiconductor investors dream about.

Third, the balance sheet. Cash sits at $1.165 billion against total liabilities of $232.01M and equity of $2.064 billion. No debt overhang forcing a bad decision at a bad time.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Credo Technology Group didn't make the cut. Grab the names FREE today.

Why Not the Obvious Names The instinct is to reach for Broadcom (NASDAQ:AVGO), Marvell Technology (NASDAQ:MRVL) or Astera Labs (NASDAQ:ALAB). I own AI silicon through other slots, and none deliver Credo’s specific mix: Quarterly revenue growth of 157% year over year while operating margin ran 35.7% trailing 12 months on a share count barely over 186 million.

Broadcom is fine, but AI networking is one slice of a giant conglomerate. Marvell’s growth rate does not sit in the same neighborhood. Astera plays an adjacent lane, but Credo’s AEC franchise, where Brennan says “AECs are up to 1,000 times more reliable and consume half the power” versus optical, gives it a moat I can point to.

The Risk I Actually Watch Insider selling has been heavy. The CTO disposed of roughly 300,000+ shares across the April to July window, and executives were selling into the recovery, not just at the highs. Customer concentration is real: the top three customers were 35%, 33% and 20% of revenue in Q1. RSU-driven selling against $662 million in annual non-GAAP net income reads as routine diversification at a rapidly compounding company, and a fourth hyperscaler is already ramping toward material contribution.

What Keeps the Buy Button Active Q1 FY2027 guidance calls for revenue of $465 million to $475 million, sequentially higher again. Analysts are bullish with 17 Buy ratings versus one hold rating and a target of $269.81. Forward P/E of 41 is not cheap, but on this growth curve I will pay it.

As long as hyperscalers keep building clusters and Credo keeps beating its own guide, my order tickets stay open.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Credo Technology Group didn't make the cut. Grab the names FREE today.

Contact [email protected] for any questions or corrections.

Key Takeaways Credo's fiscal fourth-quarter free cash flow rose to $177.5 million on $182.2 million in operating cash flow.CRDO ended the quarter with $1.4 billion in cash, supporting product innovation and accretive acquisitions.Credo is investing in AECs, ZeroFlap Optics, ALCs and OmniConnect to capture AI connectivity demand. Credo Technology Group Holding Ltd (CRDO - Free Report) posted a strong finish to fiscal 2026, delivering solid free cash flow in the fiscal fourth quarter, underscoring strengthening profitability amid explosive demand for AI infrastructure.

In the fiscal fourth quarter, cash flow from operations reached $182.2 million, increasing $16 million sequentially. With capital expenditures of just $4.8 million, free cash flow climbed to $177.5 million. The company ended the quarter with $1.4 billion in cash and equivalents, driven primarily by robust free cash flow generation.

This strong cash position provides Credo with ample financial flexibility to invest in product innovation and pursue accretive M&A. In the recent earnings call, the company noted that it remains “well capitalized” to fuel the next leg of growth, while maintaining a considerable cash buffer.     

Credo is deploying its capital strategically. Management noted that the Dust Photonics acquisition, which closed in the first quarter of fiscal 2027, utilized approximately $750 million. Despite this sizable outflow, the company expects to remain in a comfortable liquidity position, supported by operating cash flow approaching $200 million per quarter.

Further, Credo added that it may pursue opportunistic acquisitions, but has no such immediate plans. The company also has no plans to raise additional capital or authorize a share repurchase program currently.

As AI reshapes the data center architectures, it is accelerating demand for high-speed connectivity solutions. Credo lies at the intersection of AI and data center build-outs with its active electrical cables (AECs), optical Digital Signal Processors and PCIe retimers solutions that address the growing need for high-speed, low-power connectivity in the data center space.

Given this, the cash strength is strategically valuable as Credo deepens its role in the hyperscale ecosystem. The company continues to scale its AEC business while accelerating investments in newer growth areas such as ZeroFlap Optics, Active LED Cables (ALCs) and OmniConnect solutions.

How Are Competitors Faring?Although Credo has tremendous opportunities, these are unfolding in a fiercely competitive landscape. Bigger rivals like Broadcom (AVGO - Free Report) and Marvell Technology (MRVL - Free Report) , with their relatively stronger financial positions, offer some serious competition to Credo.

Broadcom is one of the giants in the semiconductor space. In the last reported quarter, free cash flow was a massive $10.3 billion (about 46% of revenues) while capex came in at $231 million. As a result, the company had about $19.6 billion of cash and cash equivalents on its balance sheet at the quarter-end.

The company sees massive opportunities in the AI space, as its hyperscaler customers have begun developing their own custom accelerators or XPUs. Broadcom is building custom silicon platforms and enabling massive compute deployments for leading hyperscalers such as Meta, as well as AI companies like Anthropic and OpenAI. AI semiconductor revenues are expected to reach $16 billion in the third quarter of fiscal 2026, up more than 200% year over year.

Strong cash position provides ample flexibility to pursue these opportunities. However, Broadcom’s acquisition-driven growth strategy (mainly the VMware acquisition) had led to a hefty debt on its balance sheet. Long-term debt was nearly $62.7 billion at the end of the last reported quarter.

Marvell Technology has been in the spotlight for some time now, especially after NVIDIA's chief publicly called it the next trillion-dollar company earlier this year. The company is now a component of the S&P 500 index. Marvell Technology’s strategic pivot to prioritize the data center market is proving to be a successful catalyst amid surging AI infrastructure spending.

The company is using its cash pile to capture AI-driven opportunities in cloud and data center infrastructure through R&D investment as well as strategic acquisitions like XConn Technologies and Celestial AI. It had $3.84 billion in cash and cash equivalents at the end of the last reported quarter. Cash flow from operations for the first quarter of fiscal 2027 was $638.8 million.

Like AVGO, Marvell Technology also has a highly leveraged balance sheet with a long-term debt of $4.96 billion as of May 2, 2026.

CRDO’s Price Performance, Valuation and EstimatesShares of CRDO have lost 23.5% compared with the Electronics-Semiconductors industry’s decline of 17.2% in the past month.

Image Source: Zacks Investment Research

In terms of the forward 12-month price/sales ratio, CRDO is trading at 15.01, higher than the Electronic-Semiconductors industry’s multiple of 8.39.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for CRDO’s earnings for fiscal 2027 has been revised upward over the past 60 days.

Image Source: Zacks Investment Research

CRDO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Lam Yat Tung, the chief operating officer of Credo Technology Group Holding Ltd (CRDO 8.63%), reported a sale of 55,998 Ordinary Shares on July 15, 2026, for a total value of $12.6 million, according to an SEC Form 4 filing.

Transaction summaryMetricValueTransaction value$12.6 millionShares sold55,998Post-transaction shares (directly held)2,584,610Post-transaction shares (indirectly held)525,000Post-transaction value$705.07 millionTransaction value based on SEC Form 4 weighted average sale price ($225.44); post-transaction value based on July 15, 2026 market close ($226.74).

Key questionsHow does this transaction affect the insider's total equity exposure?
The disposal of 55,998 shares represents a 2% reduction in the insider's total equity holdings, leaving a remaining balance of roughly 3.1 million shares valued at $705.07 million as of the July 15, 2026 market close.What was the structural nature of this disposition?
This was a discretionary open-market sale executed under a Rule 10b5-1 trading plan originally adopted by the Cheng Huang Family Trust on April 15, 2026, which allows for systematic portfolio management.How has the stock performed relative to this liquidity event?
The sale occurred at a weighted average price of $225.44 per share, while the stock was priced at $226.74 at the July 15, 2026, market close, representing a one-year return of 121%.What is the breakdown of the insider's remaining beneficial ownership?
Following the transaction, the insider holds 2,584,610 shares directly and retains an indirect interest in 525,000 shares held through two separate entities.Company OverviewMetricValueShare Price (as of market close 2026-07-15)$226.74Market Capitalization$42.3 billionRevenue (TTM)$1.3 billionNet Income (TTM)$472.3 millionCompany SnapshotCredo Technology Group specializes in advanced high-speed connectivity solutions for optical and electrical Ethernet applications, offering integrated circuits (ICs), active electrical cables (AECs), and SerDes chiplets developed through proprietary serializer/deserializer technology.The company generates revenue through the design, development, and sale of semiconductor solutions that enable high-speed data transmission across enterprise, cloud infrastructure, and telecommunications networks globally.Credo serves a diverse customer base including hyperscale data center operators, cloud service providers, and telecommunications equipment manufacturers across the United States, Mexico, Mainland China, Hong Kong, and other international markets.Credo Technology Group is a semiconductor specialist with a $42.3 billion market capitalization, generating $1.3 billion in TTM revenue with a net profit margin of approximately 36.4%, demonstrating strong operational leverage in the high-speed connectivity market. The company leverages proprietary SerDes chiplet technology to address the critical infrastructure requirements of cloud computing and next-generation Ethernet deployments. With a 121.02% one-year stock price appreciation, Credo has established itself as a key enabler of data center connectivity solutions in an increasingly bandwidth-intensive computing environment.

What this transaction means for investorsThis sale ultimately looks like a coordinated, plan-driven cash-out rather than a signal, but the full scope deserves a look. Counting a separate same-day disposition through the By Zhan BVI entity, Lam sold roughly 106,000 shares on July 15 for about $23.9 million combined, all under a trading plan set in April. That sounds like a lot, but he still controls more than 3.1 million shares worth over $700 million. Selling under 4% of a stake that size, on a preset schedule, after a 121% run, isn’t alarming even if the scale is worth noting.

The business, on the other hand, keeps validating that confidence. Credo basically just tripled fiscal 2026 revenue past $1.3 billion and grew non-GAAP net income more than fivefold to $662 million, capped by a record $437 million quarter. CEO Bill Brennan outlined expectations to achieve “continued strong financial performance” in fiscal 2027, and that type of continued executive is what will matter more than routine insider sales.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Surendra Sharma/iStock via Getty Images

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Steve Cress, Seeking Alpha's Head of Quant, discusses the economic and geopolitical shocks that have shaped the 1st half of 2026, and why it's created buy the dip opportunities (1:30) Why quant? (16:40) Top 2 stocks for H2 '26 (34:00) This is an excerpt from Top Stocks For H2 2026!

Find out the Top 10 Stocks for H2 2026 here.

Transcript

Daniel Snyder: Hey, everyone. Welcome to Top Stocks for H2 of 2026. I'm Daniel Snyder from Seeking Alpha, and you're in for a treat today. Now, if you joined us last week for last week's webinar about the review of the Top 10 from January, we know that we had one word, and that was outperformance.

Well, hopefully, the word from today on is continuation, and we're going to dive into conversation and get those picks from Steven Cress here in just a moment. But before we do, let's get a quick legal disclaimer out of the way.

Past performance is no guarantee for future results. Any views or opinions expressed may not reflect those of Seeking Alpha as a whole. The accuracy and completeness of content shared during the event cannot be guaranteed.

Content is offered for information purposes only. Analysts, Investing Group leaders, and other third parties participating in the event include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Seeking Alpha does not take account of your objectives or financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed security dealer, broker, US investment adviser, or investment bank.

And now with that out of the way, this is the best part. I get to introduce you to Steven Cress for all of you that know who he is. Well, he is back. He is the Quant Titan here at Seeking Alpha. So, obviously, we love to pick your brain on the knowledge and see what your thoughts are on the macroeconomic things that are unfolding in the market, how that's affecting the market, what you're seeing within the Quant system because you designed and built it. You know it best, and you can help guide us through these proprietary models that we've created the weighting and how we rate the stocks here today.

So, obviously, we have stocks that we're going to get into here in a little bit in the presentation, but I'd love to start off. Can you walk us through what do you see in the macroeconomic world right now?

Steven Cress: Yeah. Well, first and foremost, Daniel, thank you for organizing this event. It's one of my favorite of the year. This event and Top Stocks of January, and we've got a great track record, and I appreciate you organizing it.

I think that's a great idea. We'll cover a little bit what we see in the market, the macroeconomic world, what we see with the equity market, and what we have seen, and I'm sure many people have witnessed it and felt it in their own portfolios, is a lot of volatility during the first half of 2026.

And it is amazing that the market has hit near all-time highs in June. You could see on this chart, on the right hand side that both the S&P 500 and the Dow Jones are near record highs. The Nasdaq hit their record highs in early June, and then technology really did come off sharply. And this is amidst just a lot of uncertainty.

We have a war that's going on with Iran. We have inflation that's been very sticky, and that was a result post-pandemic and then tariffs. And then, obviously, with the war, oil surging from $70 to $120. And we, at the same time, have had this AI revolution, which has led to huge CapEx spending by hyperscalers. And, of course, additional uncertainty coming up as it is seasonal with midterm elections, and we could show you and we will show you. During the last 25 midterm elections, the market typical – is very volatile during that period.

So, it has been a period of risk-on, risk-off, risk-on, risk-off during January, but I will say our earnings have really helped keep the market near all-time highs.

You could see even when the market close to its highs, investor sentiment is very, very skittish. This is taken from the CNN Fear & Greed Index, which I commonly use. I think it's a good index. Has a lot of underlying indicators that show what sentiment are. So, these market indicators and economic indicators feed into this overall index.

You could see it is now approaching extreme fear. And this is during a period where the market is close to all-time highs. And as you look at the Fear & Greed Index, on the right hand side, you could see, what the number is. For the previous close, it was 24. A week ago, was 31. A month ago, it was actually greed, at 59. And a year ago, it was even closer to extreme greed at 64.

Investor sentiment has been all over the place. If you look at the year-to-date column, you could see easily technology has led this year, but it's a very deceptive picture. If you take a look at the five-day performance for technology and yesterday's performance, you could see technology was down 2.7%.

For the five-days, it was down 1.2% when most other sectors were up. And it's just like switching on and off every couple of weeks between technology taking the market to highs to technology falling off. Energy, you could see, is up 18% year-to-date. At one point, energy was the best performing sector. It was up close to 30%.

Obviously, that fell when it looked like we were going to have a treaty with Iran, but that has since reversed. So, there's just a lot of volatility, which has led the VIX to rally during various periods and the CNN Fear & Greed Index to fall to the fear to extreme fear territory.

And then at other times, earnings are just crushing it, both top line and bottom line. But we have our results, and that helps bring the market to new highs. So, lots of mixed uncertainty.

And, Daniel, we were just talking about this, you and I, earlier today, with the current CPI numbers. Why don't you tell the audience a little bit about the economic data that just came out and had a positive impact on the market today?

DS: Yes. It does have a positive impact. Obviously, we've been watching the inflation numbers every month, watching also producer price index numbers. But the CPI, you get a little bit of hope this morning with the release of it actually falling, which was a surprise, but probably not a surprise to some that are watching those oil prices.

Watching the oil futures, obviously, as we were doing our webinar last week, we were, I think, around $75, today, we're up closer to $80. The market's going to be watching that as well going forward because higher energy prices, obviously, can trickle down to that inflation number, but it is a little bit of a hope here. The cause being that the falling energy prices probably helped us here.

But you think about the Federal Reserve. Right? So, what comes next? We obviously have a new Fed Chair, Warsh who stepped in. The market's probably going to test him at some point. And, Steve, maybe you can talk about this little bit further into the presentation today, but thinking about the dual mandate. Right? Employment and inflation.

And with this inflation number, obviously, they're not going to react to just one inflation print. They usually look at three or more to see what the trend is, so we need to see how it pans out over the rest of the summer. But, also, keeping an eye on those employment numbers at the beginning of every month. Employment's been strong is what we've seen even with everybody talking about AI maybe having job displacement, job destruction. The numbers aren't showing it.

As you're talking about with the trade that's been going on with the AI trade, there's a lot of focus on it. But this inflation print today is definitely going to be welcomed by all, and we'll see what happens over the next two, three months, especially as you mentioned with Iran, the closure with the Strait of Hormuz, everything that's going on over there. Just as we thought we were getting a glimmer of hope, obviously, things have escalated again.

All eyes are obviously on that. But I do want to mention as well, if you were watching the bank earnings this morning, Goldman Sachs (GS), JPMorgan (JPM) earnings are strong.

To your point, earnings are coming in strong so far. However, yet I believe Dimon even said one of the big key risks right now is still that geopolitical risk.

So, Steve, do you want to talk about what you're seeing with the interest rate traders and what they're looking forward?

SC: Yeah. Absolutely. So much uncertainty. You could see before this big drop, there's a big increase of last month. And the Nasdaq really started to come off.

That's when we saw this CPI print surge. So if you go back to that period, people were really fearful. Will it continue to surge? Now, we knew we had the treaty take place, and that helped to alleviate a lot of the pressure, and oil did come down.

But as we're getting into more geopolitical events that could indicate further hostility, there's still a lot of uncertainty in there.

The interest rate target probability going out to December. So, for the FOMC December meeting, this is showing you what basically the sentiment is of interest rate traders. And this is completely different than what we were seeing really just six months ago.

Six months ago, we were looking for cuts in interest rates. Now, interest rate traders are actually betting rates are going to go higher, and that's due to persistent inflation. That's due to higher treasury yields. And you could see currently, for the Fed December meeting, about 21% of interest rate traders are expecting rates to stay unchanged.

However, you have 41% expecting a 25 basis point hike. You have 28% expecting a 50 basis point hike, and you even have 8% of interest rate traders expecting a 75 basis point hike going into that December meeting by that period. So, this is clearly a different picture than we had about a year ago.

However, we do have a lot of spending there, and, this chart shows you, it's from Goldman Sachs, and it's a really nice chart. It shows you hyperscalers and AI CapEx spending, which is absolutely tremendous. And, what I'd like to make a notation here is Goldman Sachs is looking for $1.4 trillion in hyperscaler AI CapEx spending by 2027. I remember showing a similar slide to this back in December, and this $1.4 trillion number was actually beyond 2030.

So, spending is happening at such a fast rate that Goldman Sachs actually put into this chart that they're looking for $1.4 trillion in AI CapEx spending by 2027.

And just recently, we saw a lot of the Mag 7 companies actually issuing bonds, so they could raise capital. These companies are rich in cash, really rich in cash, super profitable, out there with bond issues so they could spend more money on AI. And it's just really a testament to the revolution that's taking place. But unlike what we've seen in the past with the TMT bubble, which occurred around 1999, 2000, 2001, companies now have real revenue and real earnings.

And I was there for that period, and a lot of loans were being provided by vendors to companies that had absolutely no revenue and no earnings. And this time, we are seeing lots of capital going to companies that are earning money. And we own a lot of those stocks, and we recommend a lot of those stocks in our portfolio.

And you could see in terms of earnings, the S&P 500 (SP500) earnings outlook continues to improve. So, despite the AI bubble, despite interest rates being higher, despite inflation being higher for longer, we are seeing strong corporate profits, and that has helped to bolster the S&P to record levels up 9% year-to-date.

And in fact, S&P 500 earnings are expected to grow by 24% year-over-year for the calendar year 2026, led pretty much by technology and energy. And stocks that are exposed to AI data centers and the energy transition because AI requires a lot of energy.

And in addition, I don't want to leave out the geopolitical events with aerospace and defense spending and a lot of stockpiles having dwindled. There's going to be a lot of government spending in this area as well. There's continued reason to believe that earnings should continue to improve going forward.

And in fact, when you look at this table on the right hand side, every single sector except the healthcare sector is the only one where it shows that earnings will not be as high as March 31.

Another reason to be concerned, though, there is, outside of inflation being higher than expected, interest rates being higher than expected, geopolitical events, We are also coming up on midterm elections. I mentioned this previously, and this is a seasonal impact that does occur.

From the last 25 midterm elections, in every single case, the largest drawdown in a 12-month period occurred prior to that midterm election.

On average that there was a negative 18% drawdown in the market prior to the midterm election. So, certainly, with a lot of the economic data that's there, with interest rates potentially moving up, with inflation being higher than expected, and not knowing what's going to happen with geopolitical events on top of midterm elections, there is a lot of uncertainty.

I will say, and this is a huge benefit to this, and there's a huge opportunity here. For those who have taken advantage of this in the past, and I know many investors who have, you will see for the period after midterm elections, the three month period following it, on average, the market is up 5.8%. For the six month period, it's up 10.5%. And for the 12-month period, it's up on average 14.8%.

So, really, there is an opportunity. If the market does weaken, it is probably most likely, according to history, opportunistic to take advantage of that market weakness. And what I want to show here too is, based on the uncertainty, even though the market is trading near all-time highs, we should be prepped for this uncertainty.

So, what I wanted to highlight, and many of you may have seen this chart that we pulled together in the past, we took the last five market corrections going back to 2010, and we drew a line in the sand. And we said, if the market pulled back 15%, we would use that as an opportunity to buy the market. And when we did, if you bought into the S&P 500 when the market was down 15% and you held it for two years, on average, you were up almost 50%.

So that really demonstrates the power of being able to take advantage of the market dipping and not letting fear have you panic, but actually taking advantage of the opportunity.

And more importantly, instead of buying the S&P 500, if you bought our Top 10 Quant Strong Buys when the market pulled back and you held those for two years, on average, you would have been up 117%. So, that is a real testament to buying stocks with strong fundamentals.

And I will tell you, when the market goes into those corrective phases, even if the market's only pulling back 5% or 10% or 15%, usually stocks with strong fundamentals fall far harder and far faster. So, it's not uncommon when the market has that kind of pullback to see many of our Quant Strong Buys decline 20%, 25%, 30%, 35%, even 40% in the initial phases of a market pullback, but it creates a vast opportunity to buy stocks with strong fundamentals.

And I use here a couple of quotes from some famous investors. I like to use the one from Peter Lynch who famously said, the key to making money in stocks is not to get scared out of them. Very top one, you could see Fear & Greed are moving the market.

Panic selling during downturns can lead to financial setbacks, and that is so true. If you get scared out of the market when it corrects, that really can lead to a setback. One of our own writers here at Seeking Alpha, Cullen Roche, says, the stock market is the only market where things go on sale and all the customers run out of the store.

And, of course, Warren Buffett saying, be fearful when others are greedy and greedy when others are fearful. And, basically, when I summarize all these, I have my own quote I like to use, fear fades, the market will always return to fundamentals.

And that's why you really want to take advantage of stocks with strong fundamentals during these pullbacks. And we have our own track record to prove that. We have a product called Alpha Picks.

Alpha Picks has been out since July 2022. And with Alpha Picks, we take – we basically recommend our two strongest Quant ideas every month, and we invest in a portfolio of about 40 stocks. And what I wanted to highlight here is, in September 2022, the mini crash which occurred, the market was down about 17%. If you bought into Alpha Picks when the market was down 17%, I believe in many of the stocks and Alpha Picks were getting hit much harder than the market, had you bought in at that point when the market was off 17% and you held it, you would now be up 396%.

And then even a little bit more recently, if you went to the first quarter of 2025, where the market corrected about 12% on Liberation Day, the market was down 12%. If you bought Alpha Picks at that point, stocks with very strong fundamentals, you would be up 146% now. And even more recently, this year, in March 26, 2026 when we had the oil shock, the market pulled back 8.5%. And if you bought Alpha Picks at that point, you would be up 41% already. So, it's a real testament to buying stocks with strong fundamentals during these corrective phases.

Sentiment could be high, anxiety can run high. And, really, the purpose of Quant is to help eliminate emotion from investing. People ask what is Quant.

Quant really is not that different than what many analysts do. I was an analyst myself, and I worked at Morgan Stanley. And many analysts at Morgan Stanley or Goldman Sachs or Merrill Lynch, they tend to look at fundamental factors, and Quant isn't really any different. It looks at fundamental factors, but it does use a lot of data and math and algos to help identify investment opportunities.

So, Quant could be different for many models. Our particular model is focused on what I call GARP+. GARP would be Growth at a Reasonable Price, and then we have the plus aspect because we also look at momentum and positive EPS revisions. And there are a number of analysts that look at those factors as well. But what Quant does is, it employs the power of computer processing. So, instead of – when I was an analyst, I could only cover maybe 20 stocks at one given period. And when you cover 20 stocks, maybe you can write a full report on each stock, maybe twice a month, and then you have alerts that you might put out as well on a monthly basis. You're really limited into how much you can write and provide content.

The power of computer processing enables us to basically go through close to 5,000 stocks on a daily basis. And every single morning, we go through companies' balance sheets, income statements, cash flow statements, and hundreds of financial metrics. And we look at stocks, and we compare them to other stocks in the sector, and we score them. So, Quant gives us the ability on a daily basis to issue a directional recommendation, whether it be a Strong Buy or a Strong Sell by using data on a daily basis and comparing companies to other companies in the sector. So, it really gives us a great ability to rank stocks and differentiate the strong from the weak.

And we have a really good track record with our strategy. These are all simulated trades. This actually is not even a back-test. This goes back about five years. And what we do here is, we take all our Quant Strong Buys, and on a daily basis, we enter into a portfolio, and we measure the returns. And what you're looking at is not really an investable product. I put this out here as a demonstration of the overall strategy.

If you bought into this, or if you follow this, you would see our Quant performance is up 179% over a 5-year period just being the Quant Strong Buys, against Wall Street Strong Buys, measuring that on a daily basis, being up only 15.89%. So, you're looking at our Quant system up 179%, compared to Wall Street Strong Buys up only 15%, and the S&P 500 for the same period up 52%. So, any given day, we could have anywhere from 380 to 400 Strong Buys that are in this portfolio. So, this really demonstrates that the overall GARP strategy that we employ works well.

And we could also see our performance for this year alone is working very well. The Quant system is up 22% versus the S&P up 12.78%. This is actually a rare year where Wall Street analysts are actually doing fairly well. They're up about 13%. But you could see, over the different time horizons, whether it's five years or just year-to-date, the Quant System is handedly beating it.

So, now I want to provide a recap on our Top 10 Stocks from January, and I'll actually show you the performance for a couple other periods here. This is the actual Top 10 Stocks for H1. So, for 2026, you could see that the return from January 6 to June 29 was really 70%. That is a huge return for 10 stocks, compared to the S&P for the same period, up 8.32%. But we do have a track record. If you go to 2025 and you measure stocks that we recommended on January 9, 2025 through the end of June this year, you could see we're up 91% in those stocks versus the S&P up 27%.

If you took our recommendations from January of 2024 through June of this year, it's up a whopping 329%, compared to the S&P up 60%. And if we went back to 2023 and the stocks we bought in January then and held it to June of this year, we are up 232% versus the S&P up 101%. So that average total return is up 180% using our Quant Top 10 versus the S&P up about 50% for the same period. So, our strategy really does work very well. Whether we're looking at all the Quant Stocks, which were written Strong Buy all 380 or 400 or just our Top 10 recommendations, it has excellent performance.

I wanted to give an idea to people because we get this question all the time. We have a great track record for our top 10 stocks. And a lot of people ask me, how do I do it? Do I just go to the screen? Do I just pull the Top 10 Stocks?

I do go to our Quant Screen, and I do set some parameters and criteria. So, I am only looking for Quant Strong Buys with preferred factors and fundamentals. And I added tilt towards top and bottom line growth. So, and everyone has the capability to do this on our screening tool. So, I'll put a little bit of a tilt on growth. And then I also add a little diversification with market cap and sector diversification.

If you were to see the names that I present here, it is not necessarily in the sequential order that you would see if you ran our Quant Screen. And the reason being, when people buy these Top 10, I don't want it to be a full list of technology stocks. I want some diversification. I personally believe diversification is very important. It helps to minimize risk and maximize returns. So, even when it just comes down to my Top 10 list, I like to add that diversification through sectors, through market cap, and I do believe that helps to provide good returns over the long period. And once I highlight the sectors, I try to find the best stocks within those asset classes that have the best growth, the best valuation framework, the best profitability.

Typically, when you see the list, some of the names would be on the Quant list on that top part sequentially, but you have to go down a little bit further to see some of the other names that I recommend. For the most part, if you're looking at, like, the Top 30 Stocks, you'll see most of the stocks will coincide with that.

I do want to say, though, and we've got this question, when a stock goes to Sell from the Top 10, do you sell it immediately?

This is a list that I actually do not change. So, with the Alpha Picks Portfolio or the PRO Quant Portfolio or the Quant Growth & Income Portfolio, where those are actively managed, this Top 10 is just a static list of our Top 10 Stocks. We don't make any changes.

So if a stock falls to Sell, we're not giving you any guidance. It's really up to you as the individual to make a move. If a stock goes to Hold or Sell, you can decide to either keep it in your portfolio or remove it. This is a static list for us, so we do not make any changes.

Top 10 Stocks for 2025, as I mentioned, they're up 91%. You could see 7 out of the 10 names have generated a positive return with four stocks returning triple digits.

And if you look at this, you could see (AGX) had a return of 322%, Celestica (CLS) with a return of 266%, Credo (CRDO) with a return of 245%, and (DXPE) with a return of 101%. That was a heck of a list that we put out there. And you could see, really, 70% of the stocks are up and three stocks which are down.

And what's really nice to highlight is, the stocks that are down, I mean, one, being down 54%. No question about it. That's a lot. But you could see the stocks to the upside far, far, far outperformed those that fell.

And if we take a look at our Top 10 Stocks for 2026, which are – through the end of June, they were up close to 70%. If we take it to today, they're up close to 57%. As I mentioned, the markets have been really volatile in the first week of July, especially with geopolitical events. And a lot of the AI companies, the investors believing that they've been overextended in terms of valuation have sold-off. So, we've gone literally with – from being up 70% to up 57% in a short period.

Irregardless, I'll take 57% return any day of the week. 8 out of the 10 names have generated positive returns with 8 stocks providing double-digit returns or better.

And we have Micron Technology (MU) up 200%, Advanced Micro (AMD) up 148%, Ciena (CIEN) up 98%, Coherent (COHR) up 71%, (ATI), which is an aerospace and defense company up 55%, Allstate Financial (ALL) up 22%, almost 23%, and Celestica (CLS) up 19%, and Incyte (INCY) up 12.2%.

All the stocks that are up are beating the S&P 500. We have two names that are down, Barrick Mining (B) and Willdan (WLDN), down 21% and 34% respectively.

Having said that, stripping out the performance and just looking at our factor grades, we identify five core factors. And when we recommend stocks we want them to be collectively strong on those factors, which are value, growth, profitability, momentum, and EPS revisions.

And you could see for the most part, all Top 10 Stocks really look quite good on these various metrics. Majority of the stocks are still Strong Buy or Buy. We have three companies that have a Hold, and Hold to me means hold. It doesn't mean Sell.

And even with our Alpha Picks product, if a stock drops from a Strong Buy or Buy to Hold, we keep it in the Alpha Picks portfolio for a 180 days. So, again, Hold means hold. It does not mean Sell.

And you could see – part of the reason why is, for Coherent, the valuation grade dropped to a D. So, it's gotten a little bit expensive, but the growth grade is still an A for the company. It still has a very strong momentum, and analysts are still very positive.

You could see it has a B grade for EPS revision. So, that means the majority of analysts are taking their estimates up as opposed to taking it down. And, again, these are all sector relative grades. So, whenever you look at the valuation grade or the growth grade for this company, you know it's relative to the sector.

So, for Micron Technology with that A+ growth grade, its growth is far superior to the sector.

So, now our Top 10 stocks for the second half of 2026.

DS: Steve, I want to remind everybody too, the Quant system that you were just talking about, all those factor grades, they are refreshed every single morning before the market opens. So, you're always getting those updated metrics, the instant characteristic as Steve likes to call it.

I do want to remind everybody that the Top Stocks list, as Steve mentioned, is a snapshot in time. So, keep this as, like, a menu of ideas, of quality ideas that Steve and the Quant system and the team have put together for you so you can put it together in your watch list because this is the number one thing I do every time we do these events.

I immediately create a Seeking Alpha Portfolio. I add all these names in here. And, actually, I take the closing price of the day, and I put that in there and said, what if I did 10 shares today? What if I did a 100 shares? Whatever the account portfolio value might be that you're working with. And then that's how I track performance because I love to keep an eye on the performance on it.

And, really, I call Steve out sometimes. Let's be honest. It's fun to do. But all that aside, Steve, we got to talk about this because one of the big questions we always get is, when we get into the top 10 stocks, people want to know, are you buying these stocks?

So, let's go ahead and put that out first and foremost, you did something unprecedented that you don't normally do in the past from what I understand. So, I want to make sure we are fully transparent with everybody right here, right now, today before we get into the stock list. Do you hold these stocks?

SC: Yeah. Absolutely, Daniel. I'm really glad that you brought up because almost every time when I do this, we have comments in the articles, why don't you own these stocks? Why don't you buy these stocks? Why don't you buy these stocks?

Typically, what I do is, I wait a few weeks after this presentation to purchase the stocks. However, this year, I something that was unprecedented. I actually purchased these stocks before, and the reason why I purchased them is because they were getting crushed. And I want really to use that as an example of buying stocks when they dip.

Especially when their fundamentals are very strong, you have to, in the face of fear and negative sentiment and when anxiety is riding high, you look to these companies that have good fundamentals. Are they beating revenue expectations? Are they beating earnings expectations? Are the valuation framework strong? And it takes a lot of courage to be able to buy these stocks when they do decline, but that is really a way to create generational wealth. And I mentioned a bunch of quotes earlier, and I want to put my money where my mouth is.

So, as you saw, the Top 10 Stocks from January, at the end of June, they were up 70% in a very brief period. They went from being up 70%, up 58%. Of course, it's still a great return, but that just shows you the volatility and the type of rotation that we've had during the last two weeks.

So, this is an unprecedented time, and I really believe in these companies. I want people to know it. So, I put my money where my mouth is, and I have actually purchased these stocks.

I just want to highlight one thing. Often when I recommend the Top 10 Stocks, it's new to individuals. But I did want to highlight that we do have a product which is called Alpha Picks, and Alpha Picks has an edge because Alpha Picks employs the Quant system to identify our stocks.

And as I mentioned, every month, we provide our two favorite stocks. And I think what's really interesting here so from the stocks that I picked in January this year and the stocks that I'm about to provide to you now, many of those stocks were actually purchased earlier by Alpha Picks.

I want to show you the return on the stocks that Alpha Picks bought and the date that they were picked.

So, Celestica, which was purchased on October 16, 2023, is now up 1164%. Sterling Infrastructure, which was purchased in August of 2023, is up 957%. Credo Technology, which was picked by Alpha Picks in February of 2025, is up 244%. Micron Technology was picked in October of 2025, that's up 391%. TTM Technologies (TTMI) also picked in October of 2025, up a 131%. Incyte, which was picked in November of 2025, is up 17%. And then we have Willdan, which was up only 4%. And, at one point, that actually fell to a Sell.

Many of the names that you saw in January and that you'll see today have been owned by Alpha Picks for a while, and you could see the performance has been absolutely huge. So, I refer to that as the Alpha Picks Edge. You do not have to wait for January or July every year to get the Top 10. You can participate in Alpha Picks, which has basically included many of these stocks in the portfolio well before I selected the best Top 10 names.

Now, I also want to give favorable mention as I'm going to provide you with a list. There are four stocks that I would have included on this list, but we've been doing this for a couple of years, and many of those who follow the list like to have fresh names, and they don't want the names to repeat.

So, definitely paying attention to the group of individuals and what their preference is. I do want to mention, if you are fresh, these are stocks that I would definitely consider. So, instead of being a Top 10, you would actually say there's 14 stocks. I would have had these stocks in the list, but, again, they do repeat from our Top 10 in January. Those stocks are Micron Technology, Advanced Micro Devices, ticker symbol AMD; Ciena Corporation, ticker symbol CIEN; and Celestica, ticker symbol CLS.

All these stocks were picked in January. They naturally are still very strong. Again, we look for companies that are collectively strong on growth, value, profitability, momentum, EPS revisions. These all came at the top part of my screen. However, since they were recommended in January, we're providing 10 fresh names here. So, I just wanted to put these in front of you.

I also want to highlight that there, with a lot of the tech stocks that we have and some that aren't even in the tech sector, many are benefiting from the AI revolution. AI, I want to highlight is more than just software. A lot of it requires infrastructure.

There are semiconductor and advanced chip companies that we have. There are data centers and connectivity indirectly or directly. There's power and energy and infrastructure, and there's construction and digital infrastructure build-out.

And I think a real important point to highlight is many of the companies that fall within these industries here, they are experiencing record revenue and record earnings. And, again, this is very different than what we saw during the TMT era when companies were emerging in the stock market at huge valuations, and they had no revenue and no earnings. So, it's very different this time around.

So, our number one stock that we're going to go with today is a technology company called Credo Technology, ticker symbol (CRDO), a Quant Strong Buy. Within the IT sector, it ranked 17 out of 532 stocks. And within semiconductors, it ranked 7 out of 69. The one year return on this company has been 146%. And I don't want you to be scared by that return. The stock is close to 52-week high.

Doesn't matter. If you look at the factor grades on the right hand side, you could see that the current factor grade is a C+. So that means relative to the sector, its valuation is in-line with the sector. But importantly, if you look at the valuation grade six months ago, it was a D.

The valuation framework has actually improved. The stock is cheaper now than it was six months ago, and that's despite the stock being up 146% in the last year. And if you look at the growth rate, it's still an A+ growth rate relative to the IT sector.

The profitability is even stronger now than it was six months ago. You could see the profitability factor grade is A-. Six months ago, it was a B. And you could see the momentum grade now is an A, and analysts continue to like the company. Revisions grade implies that it's the actual quantity of analysts that are taking their estimates up or down, not the EPS number itself, but the actual quantity of analysts.

Relative to the sector, it's at a faster pace. And you know why? This company has a long term EPS growth rate of 45% versus the sector at 18%, and the company's return on equity growth rate, so this is not the absolute ROE. This is actually the growth rate of ROE. It is 302%, compared to the sector at 3.38%.

And from a valuation standpoint, even though the overall value grade is a C+, which puts it in-line with the sector, if you look at my favorite, metric, which is the PEG ratio, and that combines P/E and growth together, it puts it at 32% discount to the sector, which is fairly steep. So our first pick here is Credo Technology.

Number two is, Lumentum Holdings, ticker symbol (LITE). Company has a market cap of $62 billion. This is another Quant Strong Buy. Within IT, it ranks 7 out of 532 stocks. Its industry is specifically Communications Equipment, and it ranks 1 out of 39.

This stock up a lot as well over the last year, up 164%. And again, I want to take you immediately to the factor grades. If you look at the valuation framework for the company, it is a B+, which is a very attractive valuation, compared to the sector.

And if you looked at it six months ago, it was a D+. So, again, despite the stock moving up, its immense growth rate is carrying it, and the valuation is actually cheaper now for the company than it was six months ago. Growth A+ is as good as you can get versus the sector.

Profitability is in-line with the sector, and the momentum of the stock. And when you look at this momentum grade, again, it's relative to the sector. So, it shows you that the stock is not only outpacing the market, but it's outpacing the sector.

And it's for a good reason because its growth is so strong. And when we look at the forward EPS growth rate, it is growing at 139%. That's a three-to-five year CAGR. 139% versus the sector growing at 19%. The forward ROE growth rate on this is 96% versus the sector at 6%. And on a PEG basis, it's at 48% discount to the sector. So, Lumentum Holdings, ticker symbol, LITE.

Uncover all 10 of Steve's Top 10 Stocks for H2 2026 here.

Key Takeaways Credo's fiscal 2026 revenue more than tripled to over $1.3 billion on AI demand.CRDO expects fiscal 2027 revenue growth above 80%, supported by its expanding optical portfolio ramp.Credo cited customer concentration and supply chain constraints as key risks. Credo Technology Group Holding Ltd’s (CRDO - Free Report) shares have appreciated 165.1% over the past year, outperforming the Zacks Electronics – Semiconductors industry’s growth of 76.2%. The Zacks Computer and Technology sector and the S&P 500 composite have registered growth of 35.2% and 24.7%, respectively, over the same time frame.

The stock has outperformed Broadcom (AVGO - Free Report) , which gained 42.1% during the same period. However, Marvell Technology (MRVL - Free Report) and Astera Labs (ALAB - Free Report) have outperformed CRDO, with their shares appreciating 216.7% and 305.3%, respectively, over the past year.

Image Source: Zacks Investment Research

Let us take a closer look at CRDO’s fundamentals, key growth drivers, competitive strengths and potential risks to determine whether the stock remains an attractive investment.

Factors to ConsiderCredo is benefiting from the rapid expansion of AI infrastructure, which continues to drive strong demand for its high-speed connectivity solutions. Fiscal 2026 was another transformative year for the company, with revenue surpassing $1.3 billion, more than tripling year over year. Non-GAAP net income increased more than fivefold to $662 million, reflecting strong execution, product leadership and healthy margins. In the fiscal fourth quarter, revenue reached a record $437 million, exceeding the company's entire fiscal 2025 revenue, while non-GAAP gross margin remained strong at 68.3%. Management attributed this performance to Credo's ability to capitalize on the increasing importance of reliable, power-efficient connectivity as AI clusters continue to expand.

The company continues to strengthen its competitive position through a comprehensive connectivity portfolio designed for AI infrastructure. Its strategy spans die-to-die, chip-to-chip, multi-rack copper and facility-wide optical interconnect solutions, enabling it to address connectivity needs across the entire AI data center. Management stated that hyperscalers and Neo cloud providers increasingly seek partners capable of delivering multiple generations of connectivity products with deep system-level integration. Credo believes its vertically integrated approach, covering SerDes technology, silicon, firmware, telemetry software and system-level solutions, differentiates it from competitors and positions it as a long-term network architecture partner.

Credo's Active Electrical Cable (AEC) business remains a major growth driver. As AI clusters become larger and more complex, customers are increasingly prioritizing network reliability and power efficiency. Management noted that its ZeroFlap AECs provide significantly higher reliability than conventional laser-based optical modules while consuming less power, making them well-suited for in-rack and multi-rack deployments. The company continues to experience strong adoption among hyperscale and Neo cloud customers for both 100-gig and emerging 200-gig-per-lane deployments. It also remains on track with its PCIe Gen 6 AEC family, where customer engagement and design activity continue to expand.

The optical business is expected to become another significant growth engine. Management believes fiscal 2027 will represent an inflection point as demand increases for optical DSPs, silicon photonics and ZeroFlap optics. The recently completed acquisition of Dust Photonics expands Credo's capabilities with silicon photonics technology, strengthening its portfolio across 800G and 1.6T solutions while providing a roadmap to higher-speed products. The company expects its optical DSPs, silicon photonics PICs and ZeroFlap optics to each generate more than $100 million in fiscal 2027 revenue, with the combined optical portfolio expected to contribute more than $600 million. Management believes this portfolio will support sustained long-term growth.

Beyond its core businesses, Credo continues to advance several emerging growth opportunities. The company is developing Active Light Cable (ALC) solutions that extend the reliability and power advantages of AECs into longer-distance optical connectivity using MicroLED technology. It is also expanding its OmniConnect portfolio, including its Weaver gearbox solution, to address increasing memory bandwidth and density requirements for next-generation AI inference architectures. Customer engagement remains strong, and management expects production ramps for both ALC and OmniConnect solutions to begin in fiscal 2028, adding new long-term growth drivers.

Image Source: Zacks Investment Research

The company's financial outlook remains bright, supported by continued AI-driven demand. For fiscal 2027, Credo expects revenue growth of more than 80% year over year, with the second half benefiting from the ramp of its optical portfolio. Management anticipates non-GAAP gross margin to remain broadly consistent with fiscal 2026 levels while maintaining a non-GAAP net margin near 50%. The company also generated record operating cash flow and free cash flow during the fiscal fourth quarter, ending the year with approximately $1.4 billion in cash and cash equivalents, providing ample financial flexibility to invest in future growth opportunities.

However, Credo continues to face customer concentration and supply chain-related risks. During the fourth quarter of 2026, four customers each accounted for more than 10% of revenue, with the largest customer contributing 34%, highlighting continued dependence on a limited number of large customers despite ongoing diversification efforts. Management also acknowledged that the supply chain remains tight across the industry and noted that current fiscal 2027 guidance is based on the existing tariff environment, which remains subject to change.

A Look at CRDO’s ValuationThe stock trades at a forward 12-month price-to-sales (P/S) ratio of 18.84, above the industry’s average of 9.04. AVGO, MRVL and ALAB trade at a forward 12-month P/S of 12.25X, 14.73X and 36.42X, respectively.

Image Source: Zacks Investment Research

CRDO’s Upward EstimatesThe Zacks Consensus Estimate for CRDO’s earnings for fiscal 2026 has been significantly revised upward over the past 60 days.

Image Source: Zacks Investment Research

What Should You Do With CRDO Stock Now?Sporting a Zacks Rank #1 (Strong Buy), Credo appears to be a compelling investment opportunity at the moment.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are three stocks with buy ranks and strong growth characteristics for investors to consider today July 7th:

Macro Bank (BMA - Free Report) : This leading bank in Argentina, carries a Zacks Rank #1 (Strong Buy), and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 10.4% over the last 60 days.

Macro Bank has a PEG ratio of 0.60 compared with 0.83 for the industry. The company possesses a Growth Score of A.

Credo Technology Group (CRDO - Free Report) : This company, which offers high-speed connectivity solutions, carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 21.3% over the last 60 days.

Credo Technology Group has a PEG ratio of 0.98 compared with 1.35 for the industry. The company possesses a Growth Score of B.

Digital Turbine (APPS - Free Report) : This company, which offers products and solutions for mobile operators, device OEMs and third parties, carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 9.1% over the last 60 days.

Digital Turbine has a PEG ratio of 0.70 compared with 6.67 for the industry. The company possesses a Growth Score of B.

See the full list of top ranked stocks here.

Learn more about the Growth score and how it is calculated here.

As high-speed data centers expand to meet the demands of artificial intelligence, choosing between Credo Technology Group (CRDO +9.76%) and Marvell Technology (MRVL +1.81%) has become a critical decision for many tech-focused investors.

Credo focuses on specialized interconnect solutions that speed up data transfer, while Marvell offers a broader portfolio of networking and storage chips. While both benefit from the same infrastructure trends, they differ significantly in scale and growth profiles, making a side-by-side comparison essential for anyone looking to optimize their portfolio.

Credo Technology Group provides high-speed connectivity solutions that help modern data centers manage massive amounts of information efficiently. The company primarily serves hyperscale cloud providers within the semiconductor stocks landscape, relying on TSMC and BizLink for high-volume production. Because its top ten customers account for roughly 90% of revenue, and two customers each provide over 10%, this concentration adds a significant layer of risk to its business model.

In FY 2026, the company reported revenue of approximately $1.3 billion, representing an impressive 205.7% increase compared to the prior fiscal year. This rapid expansion was accompanied by a net income of nearly $472.3 million, which demonstrates a substantial improvement in profitability. This performance highlights a significant shift from the net losses recorded just two years ago, signaling a new phase of financial maturity for the firm.

According to its May 2026 balance sheet, the company maintains a debt-to-equity ratio of 0.0x, meaning it carries no total debt compared to its shareholder equity. Its current ratio, which measures the ability to cover short-term liabilities with current assets, stands at a robust 10.2x. Free cash flow, which is cash from operations minus capital expenditures, reached roughly $407.0 million, though stock-based compensation accounted for nearly 39.3% of operating cash flow and inflated reported cash generation.

The case for Marvell TechnologyMarvell Technology produces essential semiconductor solutions for data infrastructure, including high-performance networking, accelerated computing, and storage systems. The company recently expanded its partnership with Amazon to support the sales of Trainium AI chips while divesting its automotive ethernet business to Infineon. Since one distributor accounts for approximately 37% of revenue and a single direct customer provides 14%, Marvell faces significant concentration risks that could impact its long-term stability.

For FY 2026, the company generated revenue of approximately $8.2 billion, which reflects growth of about 42.1% compared to the prior fiscal period. This growth helped the company achieve a net income of nearly $2.7 billion, marking a powerful turnaround for the business. This result represents a significant recovery from the substantial net losses reported in both FY 2024 and FY 2025, suggesting that recent investments in AI are paying off.

As of its January 2026 balance sheet, the debt-to-equity ratio was approximately 0.3x, indicating that total debt is relatively low compared to the value of shareholder equity. The current ratio, which compares short-term assets to current liabilities, is approximately 2.0x. Free cash flow, defined as cash from operations minus capital expenditures, was nearly $1.4 billion, though stock-based compensation represented roughly 33.8% of operating cash flow and inflated reported cash generation.

Risk profile comparisonCredo faces significant risks due to its reliance on a very small group of customers for nearly 90% of its revenue. Its heavy dependence on manufacturing partners in Taiwan exposes the business to geopolitical instability, trade tensions, and potential supply chain disruptions. Additionally, the company competes in a crowded market against much larger incumbents like Broadcom, Marvell, and Astera Labs who possess greater financial and technical resources.

Marvell similarly struggles with customer concentration, as one distributor accounts for approximately 37% of its total revenue. The company also faces challenges from evolving trade policies and export restrictions between the U.S. and China, which can limit sales in critical international markets. Furthermore, successfully integrating recent acquisitions like Celestial AI, XConn, and Polariton Technologies is critical to avoiding asset impairments or failure to realize planned synergies.

Valuation comparisonWhile Marvell carries a lower P/S ratio, Credo appears more affordable based on its Forward P/E using future earnings estimates.

MetricCredo Technology GroupMarvell TechnologySector BenchmarkForward P/E39.6x60.5x357.0xP/S ratio33.8x26.2xSector benchmark uses the SPDR XLK sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?Both of these companies are on fire right now, thanks to the explosive demand for high-speed connectivity inside AI data centers. And both are growing at a pace that would have seemed improbable just a few years ago. But my pick is Marvell Technology.

Credo’s results have been impressive. Revenue has tripled in a single year, and its active electrical cable products are embedded in major AI infrastructure builds. Wall Street has been rapidly raising price targets. The momentum is there. But Credo's revenue is heavily concentrated among a small number of customers, which adds a layer of risk that investors shouldn't overlook.

Marvell operates at a completely different scale. It just posted record revenue, guided for accelerating growth through the rest of the year, and recently secured a $2 billion strategic investment from Nvidia. It also joined the S&P 500 in June, which tends to broaden institutional ownership and stabilize a stock over time.

When one company has Nvidia's backing and the other is still proving it can diversify its customer base, the choice becomes clearer.

Key Takeaways Credo's retimer business is gaining momentum with rising demand for 100G and 200G per lane solutions.CRDO's Blue Heron retimer supports Ethernet and UALink protocols for flexible AI infrastructure deployments.Credo is securing design wins with hyperscalers, OEMs and optical module makers for recurring revenues. As computing systems become more powerful and data transfer speeds continue to increase, maintaining signal integrity across complex interconnects has become a key challenge for the semiconductor industry. This is where retimers have emerged as a critical enabling technology. Among the companies capitalizing on this trend, Credo Technology Group Holding Ltd. (CRDO - Free Report) has steadily strengthened its foothold in the high-speed connectivity market. Its retimer business has reached a crucial inflection point, driven by increasing demand for solutions supporting both 100 Gbps and 200 Gbps per lane.

At the same time, the company is gaining steady traction with its PCIe Gen 6 retimers, reflecting the industry's shift toward next-generation, high-bandwidth computing platforms. A key factor driving this momentum is CRDO's Blue Heron 200 Gbps-per-lane retimer, designed specifically to meet the needs of both scale-out and emerging scale-up AI networks. The device is attracting increasing customer interest because it supports a wide range of 200 Gbps-per-lane protocols, including Ethernet, UALink and Ultra Accelerator Link (UALink)-based ecosystems, allowing customers to deploy flexible, future-proof AI infrastructure.

As AI clusters grow larger and more complex, protocol diversity is rising, making interoperability and signal integrity more important than ever. CRDO believes its deep system-level expertise, paired with its strong software integration capabilities, offers a significant competitive edge. These strengths not only simplify customer deployments but also position CRDO to continue expanding its market share as next-generation AI networking infrastructure develops. Securing design wins with major hyperscalers, networking OEMs and optical module manufacturers position the company for long product lifecycles and recurring revenues as customer deployments scale.

Competition Heating Up in the PCIe Retimer Market for CRDOAstera Labs (ALAB - Free Report) is benefiting from rising demand for PCIe 6 signal conditioning and AI fabric switching as hyperscalers expand rack-scale AI deployments. PCIe Gen 6 business, spanning AI fabric and signal conditioning, remained strong in the first quarter, contributing more than one-third of total revenues. It has now shipped millions of PCIe Gen 6 ports, underscoring the maturity and reliability of its portfolio. The combination of higher-speed interconnect needs and increasing platform diversity supports ongoing content expansion per accelerator. Management expects continued strength in Aries and Taurus and an early-stage ramp in Scorpio X-Series, guiding second-quarter revenues to $355-$365 million. 

Broadcom Inc. (AVGO - Free Report) is benefiting from rising demand for AI semiconductors, driven by custom XePUs and AI networking, while VMware continues to support growth in infrastructure software. In networking, AVGO maintains at least a one-generation technology lead. Its 200G and 400G SerDes power direct-attached copper for scale-up networks, while its 100 Tbps Tomahawk 6—the industry's first Ethernet switch at that speed—has been shipping for more than a year, strengthening its leadership in scale-out networking. Broadcom expects to tape out its next-generation 200-terabit switch in fiscal 2026. For fiscal 2026, management expects AI semiconductor revenues of $56 billion, up approximately 180%.

CRDO Price Performance, Valuation and EstimatesShares of CRDO have surged 160.9% in the past year compared with the Electronics-Semiconductors industry’s growth of 74.9%.

Image Source: Zacks Investment Research

In terms of the forward 12-month price/sales ratio, CRDO is trading at 17.68, higher than the Electronic-Semiconductors industry’s multiple of 8.93.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for CRDO’s earnings for fiscal 2027 has seen a significant uptick over the past 60 days.

Image Source: Zacks Investment Research

CRDO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

© sommart sombutwanitkul / Shutterstock.com

After a 89% year-to-date rally that has taken shares from $143.89 to $271.95, Credo Technology Group (NASDAQ: CRDO | CRDO Price Prediction) has become one of the most talked-about AI infrastructure plays on the market.

Our 24/7 Wall St. price target for Credo is $248.61, implying -8.58% downside over the next 12 months. Our recommendation is hold, with a high 90% confidence level.

24/7 Wall St. Price Target Summary Metric Value Current Price $271.95 24/7 Wall St. Price Target $248.61 Upside/Downside -8.58% Recommendation HOLD Confidence Level 90% A Note Before We Begin Our 24/7 Wall St. price target of $248.61 sits modestly below where Credo trades today. Credo is one of the purest AI connectivity plays in the market, and real upside could come from the recently announced ZeroFlap optics ramp or the DustPhotonics acquisition unlocking silicon photonics revenue. Treat our target as one datapoint among many. A detailed bull case follows.

The Rally Behind a 193% One-Year Gain Credo is up 15.22% over the past month and 193.71% over the past year, sitting 13% below its 52-week high of $308.67. The most recent surge came on June 30, when shares jumped 10.69% following Credo’s reclassification from the Russell 2000 into the Russell 1000 and Russell Midcap indices.

Fundamentally, the story is loud. Q4 FY2026 revenue landed at $437 million, up 157.0% year over year, and non-GAAP EPS of $1.16 beat consensus by 12.17%, marking four consecutive quarters of EPS beats. Full-year revenue more than tripled to $1.34 billion.

Why Bulls See a Breakout Ahead The bull case rests on TAM. BNP Paribas initiated coverage with a $275 target, arguing Credo’s addressable market could exceed $10 billion with 5 of 6 hyperscalers already customers. Evercore ISI initiated Outperform at $325, citing optical DSPs via DustPhotonics.

Stifel reiterated Buy and raised its target to $350 from $250. CEO Bill Brennan noted, “Fiscal 2026 marked another defining year for Credo. For the year, revenue more than tripled to $1.3 billion, and non-GAAP net income increased more than five times to $662 million.” Our bull-case 1-year target is $334.49.

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The Risks Worth Watching Credo trades at a trailing P/E of 109 and a forward P/E of 42. Simply Wall St pegs fair value at $130, implying the stock is roughly 100% above intrinsic value.

Insider selling reached $77.5 million in the recent period, though bulls fairly note these sales occurred under pre-arranged Rule 10b5-1 trading plans and reflect tax obligations rather than conviction changes. Customer concentration among hyperscalers remains a real risk if AI capex cools. Our bear-case 1-year target is $196.98.

Hold for Now, Watch for a Pullback Our 24/7 Wall St. price target remains $248.61 with a hold recommendation and 90% confidence. The scale tipper is valuation: at an implied P/E near 80, Credo is priced for flawless execution.

A pullback into the low $200s with hyperscaler AEC bookings intact would improve the risk/reward. Conversely, slipping optical DSP ramps or softer hyperscale capex guidance into calendar 2027 would weaken the setup.

Looking further out, here is where our model projects Credo could trade, assuming current AI infrastructure growth trajectories hold.

Year 24/7 Wall St. Price Target 2026 $248.61 2027 $268.00 2028 $285.00 2029 $305.00 2030 $254.00 These projections assume Credo continues executing on its 1.6T connectivity roadmap and successfully integrates optical acquisitions. Significant upside could result from broader hyperscaler adoption; significant downside could follow an AI capex slowdown.

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Contact [email protected] for any questions or corrections.

Key Takeaways PDLB, CRDO, TILE, CIEN and CZFS passed screens for above-industry efficiency ratios and top Zacks Rank.The screen favors high inventory turnover, receivables turnover, asset utilization and operating margin. The five companies also posted positive average four-quarter earnings surprises ranging from 10.45% to 43.46%. Efficiency measures how well a company turns inputs into outputs and is a key indicator of its profit-generating potential. A company with a high efficiency level is expected to provide stellar returns, as it is believed to be positively correlated with price performance.

However, at times, it becomes difficult to measure the efficiency level of a company. This is why one must consider popular efficiency ratios while selecting stocks.

Ponce Financial Group (PDLB - Free Report) , Credo Technology Group (CRDO - Free Report) , Interface (TILE - Free Report) , Ciena (CIEN - Free Report) and Citizens Financial Services (CZFS - Free Report) made it through the screening process.

The efficiency ratios are:

Receivables Turnover: This is the ratio of 12-month sales to four-quarter average receivables. It shows a company’s potential to extend its credit and collect debt in terms of that credit. A high receivables turnover ratio, or the “accounts receivable turnover ratio” or “debtor’s turnover ratio” is desirable as it shows that the company is capable of collecting its accounts receivables or that it has quality customers.

Asset Utilization: This ratio indicates a company’s capability to convert assets into output and is thus a widely known measure of efficiency level. It is calculated by dividing total sales over the past 12 months by the last four-quarter average of total assets. Like the above ratios, high asset utilization may indicate that a company is efficient.

Inventory Turnover: The ratio of the 12-month cost of goods sold (COGS) to a four-quarter average inventory is considered one of the most popular efficiency ratios. It indicates a company’s ability to maintain a suitable inventory position. While a high value indicates that the company has a relatively low inventory level compared to COGS, a low value indicates that the company is facing declining sales, which has resulted in excess inventory.

Operating Margin: This efficiency measure is the ratio of operating income over the past 12 months to sales over the same period. It measures a company’s ability to control operating expenses. Hence, a high value of the ratio may indicate that the company manages its operating expenses more efficiently than its peers.

Screening CriteriaIn addition to the above-mentioned ratios, we have added a favorable Zacks Rank — Zacks Rank #1 (Strong Buy) — to the screen to make this strategy more profitable. You can see the complete list of today’s Zacks #1 Rank stocks here.

Inventory Turnover, Receivables Turnover, Asset Utilization, and Operating Margin greater than the industry average(Values of these ratios higher than industry averages may indicate that the efficiency level of the company is higher than its peers.)   

The use of these few criteria has narrowed down the universe of over 7,906 stocks to 15.

Our ChoicesHere are the top five stocks that made it through the screen:

Ponce Financial Group

Ponce Financial Group is the financial holding company for Ponce Bank. PDLB has an average four-quarter earnings surprise of 43.46%.

Credo Technology

Credo Technology offers high-speed connectivity solutions. CRDO has an average four-quarter earnings surprise of 27.35%.

Interface

Interface is the world's largest manufacturer of modular carpet. TILE has an average four-quarter earnings surprise of 26.75%.

Ciena

Ciena is a leading provider of optical networking equipment, software and services. CIEN has an average four-quarter earnings surprise of 19.45%.

Citizens Financial Services

Citizens Financial Services is the bank holding company for First Citizens National Bank. CZFS has an average four-quarter earnings surprise of 10.45%.

It has been about a month since the last earnings report for Credo Technology Group Holding Ltd. (CRDO - Free Report) . Shares have added about 18.8% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Credo Technology Group due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Credo Technology Group Holding Ltd. before we dive into how investors and analysts have reacted as of late.

Credo's Q4 Earnings & Revenue BeatCredo Technology reported fourth-quarter fiscal 2026 non-GAAP diluted earnings per share of $1.16, which beat the Zacks Consensus Estimate of $1.03 by 12.6%. GAAP diluted earnings rose to 88 cents from 20 cents in the prior-year quarter.

Revenues surged 157% year over year to $437 million and surpassed the consensus mark of $430.1 million by 1.6%. The upside was driven by strong AI connectivity demand, with the top four end customers each contributing at least 10% of revenues.

Management said fourth-quarter revenues exceeded the company’s total fiscal 2025 revenues, highlighting the speed of the current AI infrastructure ramp. Fiscal 2026 revenues surpassed $1.3 billion, more than tripling year over year.

The company’s portfolio is positioned around high-speed copper and optical interconnects that help large AI clusters improve reliability, power efficiency and signal integrity. Management noted that connectivity has become a critical constraint as clusters scale from tens of thousands to hundreds of thousands of GPUs.

AECs remained a key growth engine. In addition to AEC, CRDO is now focusing on the IC portfolio (retimers and DSPs). The company expects mid-single-digit sequential growth in the first half of fiscal 2027, followed by a stronger second-half acceleration buoyed by its optical portfolio. Management projects more than $600 million in optical revenues, with ZeroFlap optics, silicon photonics PICs and optical DSPs each contributing more than $100 million. This is expected to support more than 80% year-over-year revenue growth for the full year.

The acquisition of Dust Photonics strengthens Credo’s high-speed optical connectivity portfolio with silicon photonics PIC technology. The deal adds advanced technology, including 800G and 1.6T solutions, and would aid in developing upcoming 3.2T solutions.

Margins Reflect Strong Operating LeverageNon-GAAP gross profit was $298.4 million in the fourth quarter compared with $114.5 million in the year-ago period. Non-GAAP gross margin expanded to 68.3% from 67.4% a year earlier.

Non-GAAP operating expenses increased to $81.7 million from $52 million in the prior-year quarter. The increase reflected continued investment in research and development. Non-GAAP operating income rose to $216.7 million from $62.5 million. Non-GAAP net margin reached 51.9% in the fiscal fourth quarter, underscoring the company’s ability to convert top-line growth into bottom-line profitability.

For fiscal 2026, the company reported a non-GAAP gross margin of 68.1%, improving by 310 basis points year over year, while operating margins expanded significantly to 47.8%.

Cash Flow NumbersCash flow from operations was a record $182.2 million in the quarter. Capital expenditures were $4.8 million, resulting in free cash flow of $177.5 million. Credo ended the quarter with cash, cash equivalents and short-term investments of $1.4 billion, up from $431.3 million at the end of the year-ago period.

Outlook Points to Continued ExpansionFor the first quarter of fiscal 2027, Credo expects revenues of $465-$475 million. Non-GAAP gross margin is projected between 67% and 69%, while non-GAAP operating expenses are expected in the range of $86-$90 million.

For fiscal 2027, management expects more than 80% year-over-year revenue growth. The company anticipates non-GAAP gross margin to remain broadly consistent with fiscal 2026 levels and non-GAAP operating expenses to rise approximately 50%, well below the expected revenue growth rate.

Four hyperscalers each contributed 10% or more of total revenues in the last reported quarter, with the top three customers representing 34%, 27% and 16% of revenues. Beyond the traditional hyperscalers, Credo is also seeing increasing demand from emerging Neocloud providers.

Credo continues to expect that three to four customers will account for more than 10% of revenues in the upcoming quarters.

How Have Estimates Been Moving Since Then?It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 18.12% due to these changes.

VGM ScoresAt this time, Credo Technology Group has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock has a score of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Credo Technology Group has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry PlayerCredo Technology Group is part of the Zacks Electronics - Semiconductors industry. Over the past month, Marvell Technology (MRVL - Free Report) , a stock from the same industry, has gained 2.4%. The company reported its results for the quarter ended April 2026 more than a month ago.

Marvell reported revenues of $2.42 billion in the last reported quarter, representing a year-over-year change of +27.6%. EPS of $0.80 for the same period compares with $0.62 a year ago.

Marvell is expected to post earnings of $0.93 per share for the current quarter, representing a year-over-year change of +38.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.5%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Marvell. Also, the stock has a VGM Score of F.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Artificial intelligence has no shortage of obstacles. The industry is scrambling to secure enough electricity to power new data centers, enough land to build them, and enough high-bandwidth memory (HBM) to keep next-generation chips fed with data. 

Yet another constraint is emerging that could prove just as important: moving information between those chips fast enough to keep them working. As AI clusters grow from thousands to hundreds of thousands of GPUs, the network connecting them is becoming just as valuable as the processors themselves. 

For investors, that shifts attention beyond Nvidia (NASDAQ:NVDA | NVDA Price Prediction) and toward the companies building AI’s digital highways.

AI Needs Better Roads, Not Just Faster Cars Intel (NASDAQ:INTC) CEO Lip-Bu Tan said on the No Priors podcast that the best investment opportunities lie where technology runs into a bottleneck. Today, one of the clearest choke points is interconnect technology — the hardware that transfers data between GPUs, CPUs, storage, and memory throughout an AI data center.

A modern AI cluster is really a massive logistics hub. GPUs perform the calculations, but every result depends on data arriving exactly when it is needed. If information is delayed, expensive processors sit idle. That wastes electricity, computing capacity, and billions of dollars of infrastructure investment.

The problem grows with scale. Traditional copper connections struggle to carry ever-faster electrical signals over longer distances because heat rises, power consumption increases, and signal quality deteriorates. Fiber optics solves many of those limitations by transmitting data as pulses of light instead of electricity, allowing far greater bandwidth while consuming less power.

Seven Companies Building AI’s Connectivity Infrastructure Company AI Connectivity Role Recent Highlights Credo Semiconductor (NASDAQ:CRDO) High-speed optical connectivity and active electrical cables Fiscal 2026 revenue reached approximately $1.3 billion, while four hyperscale cloud providers each represented more than 10% of sales. Astera Labs (NASDAQ:ALAB) PCIe connectivity, memory expansion, and AI fabric solutions First-quarter 2026 revenue climbed 93% year over year to $308 million. Coherent (NASDAQ:COHR) Lasers, optical transceivers, and photonic components Customer demand for AI optical products has extended backlog visibility well into 2028. Marvell Technology (NASDAQ:MRVL) Optical networking, custom AI silicon, and switching Expanded its AI portfolio through the acquisition of Celestial AI and its photonic fabric technology capable of delivering up to 16 terabits per second of bandwidth. Lumentum (NASDAQ:LITE) Optical engines and laser components Continues expanding production to meet accelerating AI networking demand. Corning (NYSE:GLW) Fiber optic cable and connectivity solutions Leveraging decades of fiber manufacturing expertise to support hyperscale AI deployments. Ciena (NASDAQ:CIEN) Optical transport systems linking AI data centers Benefiting from rising investments in long-distance, high-capacity networking infrastructure. Surprisingly, none of these companies manufactures the AI processors grabbing headlines. Instead, they build the infrastructure that allows those processors to work together efficiently.

Connectivity Could Become AI’s Next Arms Race Every billion dollars a hyperscaler spends on GPUs creates additional demand for networking switches, optical modules, fiber, lasers, cables, and connectivity chips. Compute power alone no longer determines AI performance. The speed at which thousands of processors exchange information increasingly defines how much useful work those processors can perform.

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That helps explain why Nvidia has aggressively expanded into photonics and optical networking through investments and strategic partnerships. CEO Jensen Huang also emphasized during Computex 2026 that while copper remains effective over shorter distances, optics become essential as AI systems scale across larger data centers.

Granted, these companies carry risks. Many rely heavily on a handful of hyperscale customers, and spending cycles can fluctuate from quarter to quarter. Valuations across AI infrastructure also remain elevated after a powerful multiyear rally.

Still, the long-term trend appears difficult to ignore. Industry spending is expanding beyond chips into every layer supporting AI infrastructure.

Key Takeaway In short, AI’s next breakthrough may not come from building a faster GPU but from ensuring thousands of them can communicate without delay. Investors have spent the past three years focusing almost exclusively on semiconductor designers. The next phase of the AI buildout broadens the opportunity to companies enabling high-speed connectivity. 

Credo Semiconductor and Astera Labs offer the purest exposure to the networking bottleneck, while Marvell, Coherent, Lumentum, Corning, and Ciena provide investors with different ways to participate in what could become one of AI’s fastest-growing infrastructure markets. 

Ultimately, as AI clusters continue expanding, the companies building the digital roads between processors may prove every bit as indispensable as those building the processors themselves.

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Credo Technology Group (NASDAQ:CRDO) stock climbed Monday after Wall Street analysts raised their outlook on the AI connectivity chipmaker.

On Monday, Stifel maintained its Buy rating on Credo and increased its price forecast to $350. Evercore ISI Group initiated coverage on Credo with an Outperform rating. The firm announced a price forecast of $325.

The update follows recent recommendations from market commentator Jim Cramer, who recommended holding the stock on June 15, describing the company as “just so good.”

The analyst upgrades follow Credo’s fiscal fourth-quarter earnings report, published after the market close on June 1. The company posted revenue of $437 million, beating analyst estimates of $432.05 million. Adjusted earnings reached $1.16 per share, ahead of expectations of $1.03 per share.

Total revenue rose 157% year-over-year, supported by $1.4 billion in cash and short-term investments. Despite the earnings beat, the stock initially fell 13.67% to $195.32 during after-hours trading on June 1 due to short-term trader de-risking.

Workplace Honors and Corporate MissionCRDO’s Key Support and Resistance LevelsCRDO is in a clear long-term uptrend, trading well above every major moving average: about 23.8% above the 20-day SMA ($231.84) and roughly 86.8% above the 200-day SMA ($153.60).

Trend structure has stayed constructive since the golden cross in May (the 50-day SMA moving above the 200-day SMA), and the stock has continued to build on that bullish backdrop.

Key Resistance: $274.90 Key Support: $231.84 Credo Technology Price ActionCRDO Price Action: Credo Technology Group shares were up 5.04% at $285.52 during premarket trading on Monday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

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Credo Technology CRDO stock surged 8.6% in trading after Evercore ISI initiated coverage with an Outperform rating and a $325 price target, the most bullish call on Wall Street.

That target sits roughly 20% above Friday’s record-high close of $271.83.

Evercore analyst Mark Lipacis argued that the market is underestimating Credo’s long-term opportunity and expects the company to evolve from a copper-focused AI connectivity provider into a broader copper-plus-optical platform.

The initiation came on the same day BNP Paribas also issued a positive note on the stock, adding to a wave of bullish sentiment around the company.

Evercore’s thesis centers on strong growth in Credo’s Active Electrical Cable (AEC) business and the emerging optical segment.

The firm projects 100% growth in AEC solutions in 2026, followed by 60% growth in 2027.

It also expects Credo’s optical portfolio to become a meaningful driver, potentially accounting for roughly 25% of total revenue by 2027.

Credo has built its business around full-system solutions, selling complete Active Electrical Cable systems rather than standalone chips.

The company is now extending this model into optical products, including optical DSPs, silicon photonics, and ZFOptics modules.

Evercore also expects the optical portfolio to accelerate in the coming years, with its adoption expanding across hyperscale infrastructure.

The firm estimates Credo’s total addressable market could expand 10 to 20 times from its current $5 billion to $10 billion range as optical capabilities scale.

Evercore’s projections follow a strong earnings performance from Credo.

The company reported Q4 FY2026 revenue of $437 million, up 157% year-over-year, with non-GAAP EPS of $1.16 beating estimates.

Full-year FY2026 revenue more than tripled to $1.34 billion.

Several major brokerages, including Needham, Roth Capital, Bank of America, Jefferies, Mizuho, JPMorgan, and Goldman Sachs, raised their price targets after the results, citing strong momentum and FY2027 revenue guidance projecting over 80% growth.

Evercore’s outlook is notably more aggressive than consensus, with a 2028 EPS projection above $13, implying a compound annual growth rate of more than 70% and roughly 40% above Street estimates.

BNP Paribas analyst Karl Ackerman also maintained a constructive stance, keeping a $275 price target and highlighting expansion in Credo’s total addressable market.

“We believe AECs, ZF optical transceivers, silicon photonics, Active LED Cables, and OmniConnect gearboxes expand Credo’s TAM to over $10B — or 3x from Credo’s opportunity just 18 months ago,” Ackerman wrote.

BNP also pointed to strong supply chain visibility, with hyperscaler customers providing demand forecasts 12 to 36 months out and firm orders placed three to six months in advance.

The firm expects Credo’s optical DSP portfolio to surpass $100 million in sales in fiscal 2027.

Credo is currently engaged with five of the six major hyperscalers, including Amazon, Meta, Microsoft, xAI, and Oracle, reinforcing investor focus on its role in AI infrastructure growth.

Shares of semiconductor name Credo Technology Group Holding Ltd (NASDAQ:CRDO) are surging 10.3% at $299.88 this morning, enjoying the fruits of several bull notes. Evercover ISI initiated coverage with an "outperform" rating and $325 price target, while Stifel hiked its price target to $350 from $250. The firms cited long-term growth and the semiconductor's "AI-connectivity play."

CRDO is headed for a third-straight pop, eyeing its best daily performance in nearly two weeks after tapping a record high $308.67 earlier. The shares have more than doubled since the start of 2026, with brief support stemming from the $240 floor.

Bulls have been circling in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Credo Technology stock's 10-day call/put volume ratio of 3.24 ranks in the 85th annual percentile. This sentiment is echoed by the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.89, which ranks higher than just 28% of readings from the past year.

Short sellers have been retreating, with short interest down 8.2% during the most recent reporting period. This accounts for 6.3% of the stock's available float, or less than two days' worth of pent-up buying power.

It's also worth noting that the stock sports a Schaeffer's Volatility Scorecard (SVS) of 80 out of 100. This suggests the equity has consistently realized higher-than-expected volatility over the past 12 months.

Company Named a USA TODAY Top Workplace and San Francisco Bay Area Top Workplace for Creating People-First Culture

SAN JOSE, Calif.--(BUSINESS WIRE)--Credo Technology Group Holding Ltd (Credo) (NASDAQ: CRDO), an innovator in providing connectivity at scale through fast, reliable, and energy-efficient system solutions, has been recognized as a winner of the prestigious 2026 USA TODAY Top Workplaces award for the second year in a row. The award reflects Credo’s continued commitment to fostering a workplace culture that empowers employees, celebrates collaboration, and fuels innovation.

“This recognition reflects the exceptional people across our company and reinforces our commitment to creating an environment where innovation can thrive and everyone has the opportunity to make an impact,” said Bill Brennan, President and CEO, Credo.

Share The USA TODAY Top Workplaces awards honor organizations with 150 or more US employees that have built exceptional, people-first cultures. This year, more than 100,000 organizations were invited to participate. Winners are determined based on authentic employee feedback gathered through an anonymous survey conducted by Energage, the HR research and technology company behind the Top Workplaces program since 2006. Results are calculated from employee responses to key statements aligned with specific workplace experience themes, and are proven indicators of high-performing organizations.

The results also placed Credo as a winner in the 2026 San Francisco Bay Area Top Workplaces program, conducted in partnership with Axios, for the third year in a row, and a 2026 Culture Excellence Awards winner in multiple categories—all based on employee feedback from Energage’s workplace survey. Credo was honored in the following core areas of the employee experience proven to drive performance: Innovation, Work-Life Flexibility, Compensation and Benefits, Leadership, Purpose and Values, Professional Development, Employee Well-Being and Employee Appreciation.

“Being named a USA TODAY Top Workplace, and a San Francisco Bay Area Top Workplace, is especially meaningful because it reflects the voices of our employees—the people who shape our culture every day,” said Bill Brennan, President and CEO, Credo. “At Credo, we believe that strong teams, a shared sense of purpose, and a culture of trust and respect are essential to long-term success. This recognition reflects the exceptional people across our company and reinforces our commitment to creating an environment where innovation can thrive and everyone has the opportunity to make an impact.”

“Earning a USA TODAY Top Workplaces award is a testament to an organization’s credibility and commitment to a people-first culture," said Eric Rubino, CEO of Energage. "This award, driven by real employee feedback, is more than just a recognition—it’s proof that your employees believe in the organization and its leadership. Job seekers and customers look for this trusted badge of credibility and excellence. It signals a company that values its people, and that kind of culture resonates in today’s competitive market.”

Credo has invested in employee engagement, development, and well-being programs that foster a culture of transparency, recognition, and continuous growth. Credo’s dedication to cultivating a culture that reflects the highest standards of workplace excellence has been instrumental in creating a people-first working environment that attracts top talent in the industry.

About Credo

Credo’s mission is to transform connectivity at scale through fast, reliable, and energy-efficient system solutions. Our high-speed copper and optical interconnect products deliver industry-leading power and performance at up to 1.6T to meet the ever-expanding data infrastructure demands of AI.

Our product portfolio includes ZeroFlap (ZF) Active Electrical Cables (AECs) and ZF optical transceivers, OmniConnect memory solutions, and a suite of retimers and DSPs for optical and copper Ethernet and PCIe, all leveraging the PILOT diagnostic and analytics software platform. Credo innovations enable our customers to connect the systems that connect the world.

For more information, please visit https://www.credosemi.com. Follow Credo on LinkedIn.

Credo, the Credo logo and the color purple when associated with AECs are registered trademarks of Credo Technology Group Limited in the United States and other jurisdictions. All other trademarks referenced herein are the property of their respective owners.

© ShutterstockProfessional / Shutterstock.com

Credo Technology (NASDAQ:CRDO | CRDO Price Prediction) has become one of the AI infrastructure trade’s most explosive winners, with shares up 252.99% over the past year and 80.28% year-to-date.

The question on every shareholder’s mind is whether the stock can punch through $300 before December. Our 24/7 Wall St. price target for Credo is $244.97, sitting just below the current quote of $259.41. We rate shares a hold with high conviction.

24/7 Wall St. Price Target Summary Metric Value Current Price $259.41 24/7 Wall St. Price Target $244.97 Upside/Downside -5.57% Recommendation HOLD Confidence Level 90% Why We Could Be Wrong Our 24/7 Wall St. price target of $244.97 sits modestly below where Credo trades today. This is one of the AI complex’s most volatile names, and real upside could come from a hyperscaler raising AI capex guidance or from Credo’s 1.6T optical DSP reaching production faster than expected. Consider our target one datapoint among many. The full bull case below outlines why CRDO could still outrun our model.

From $79 to $259 in a Year Credo has rallied 16.71% in the past week and 50.67% in the past month, putting shares roughly 5% off the 52-week high of $270.21.

The fuel was Q4 FY2026 earnings reported June 1, 2026: revenue of $437 million grew 157% YoY, and non-GAAP EPS of $1.16 beat the $1.03 estimate. Full fiscal 2026 revenue more than tripled to $1.34 billion with non-GAAP net income jumping more than 5x to $662 million. Q1 FY2027 guidance calls for revenue of $465M to $475M.

The Case for $300+ Bulls argue Credo is still early. CEO Bill Brennan told investors that fiscal 2026 saw revenue more than triple and net income rise 5x, adding that Credo enables customers to accelerate cluster time-to-stability, maximize GPU utilization, improve network reliability, and reduce overall infrastructure power and operating costs.

A fourth hyperscaler is ramping past the 10% revenue threshold and a fifth is qualifying. Active Electrical Cables run 1,000 times more reliable at half the power of optical, opening node-to-tor and scale-up markets that could be an order of magnitude larger than scale-out. Our bull-case trajectory has CRDO reaching $294.02 by December 16, 2026 and crossing $302.23 by March 2027.

The Risks Worth Watching Credo trades at an implied P/E near 76 on forward EPS, leaving little margin for an AI capex digestion phase. Customer concentration remains real, though bulls counter that the top-three mix is diversifying as new hyperscalers ramp.

Inventory nearly tripled YoY and operating expenses are rising, but management frames the R&D buildout as funding optical projects and forthcoming business pillars. Our bear case sees CRDO at $209.03 by year-end if AI orders pause.

Credo Price Prediction 2026-2030 I land on hold with 90% confidence and a 24/7 Wall St. price target of $244.97. The fundamentals are pristine, but the stock has already done the work.

I’d be a buyer if shares pulled back to the low $200s or if Credo guides Q2 FY2027 above $500M. I’d stay on the sidelines if the implied P/E pushes past 90 without a corresponding guide raise. Hitting $300 by year-end is achievable in a bull tape, but the base case says it slips into early 2027.

Year 24/7 Wall St. Price Target 2026 $254.73 2027 $278 2028 $305 2029 $335 2030 $365 These projections assume Credo continues executing on hyperscaler ramps and optical expansion. Significant upside or downside could result from a step-change in AI capex or a shift toward in-house silicon at major cloud customers.

Chip designers Nvidia (NVDA 2.16%) and Broadcom (AVGO 4.24%) have been two of the biggest beneficiaries of the artificial intelligence (AI) infrastructure build-out. Yet in 2026, a much smaller semiconductor company, Credo Technology (CRDO 7.80%), is leaving both behind in share price gains.

Image source: Getty Images. 

Shares of Credo are up about 74% year to date as of June 13, while Nvidia and Broadcom have gained nearly 10% and 11%, respectively. Here's why Credo may sustain its outperformance in the coming months.

Credo is becoming a prominent networking player Credo provides high-speed, energy-efficient connectivity solutions that help GPUs work together efficiently inside AI data centers. Since large AI clusters can include tens of thousands of GPUs, even minor connection failures can slow deployments, reduce GPU utilization, and increase downtime costs. Credo helps resolve this problem by making AI networks more reliable, easier to scale, and more power-efficient.

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Credo's active electrical cables (AECs) help connect servers and server racks inside AI data centers in a power-efficient and reliable way. In fact, the company says its ZeroFlap AECs are up to 1,000 times more reliable and still more power-efficient than traditional optical network connections.

Credo's financials are also impressive. In its fiscal 2026, which ended May 2, revenues rose 206% to $1.3 billion, while non-GAAP earnings per share soared 392% to $3.46.

Growing optical portfolio Management is guiding for Credo's revenue to grow by more than 80% in its fiscal 2027, helped by a sharp ramp-up in its optical connectivity business. The company expects this portfolio to generate more than $600 million in revenue. 

AI networks increasingly need to move data at much higher speeds, including 800G, 1.6T, and eventually beyond. Traditional copper-based AECs are well-suited for short connections inside and between nearby server racks. However, optical connectivity is better suited for longer distances because it can move data faster with lower signal loss. That makes Credo's optical capabilities increasingly important. The company's recent acquisition of DustPhotonics strengthened its optical portfolio by adding silicon photonics technology, which can enable faster, more power-efficient optical connections. The deal also gave Credo better control over its optical technology, helping it to detect connection problems earlier and improve network performance.

The shift toward 1.6T networks could also increase Credo's revenue opportunity because customers will need higher-bandwidth, more advanced connectivity products. Hence, management expects that transition in the tech sector to support higher average selling prices for Credo's products.

However, certain risks cannot be ignored. Credo already trades at a rich valuation of nearly 42 times forward earnings. The company is also exposed to significant customer concentration risk. In the fourth quarter, four customers accounted for 34%, 27%, 16%, and 10% of its total revenues, respectively.

But the trend is improving. Management said its fourth-largest customer in the fourth quarter was a new one, suggesting that it is slowly diversifying its customer base. Neocloud providers could also become a more meaningful opportunity as they build AI infrastructure for model developers, enterprises, sovereign AI, inference, and agentic workloads.

Hence, while Credo is riskier than Nvidia or Broadcom, it is also a smaller and faster-growing bet on AI connectivity and optical networking.

Key Takeaways Credo's fiscal 2026 revenues rose 206% to $1.3B as AI infrastructure demand lifted its portfolio.Credo expects optical revenues to top $600M in fiscal 2027, with three products above $100M each.Four hyperscale customers each made up at least 10% of Q4 revenues, keeping concentration risk in focus. Credo Technology Group Holding Ltd (CRDO - Free Report) is moving through a new phase of its AI connectivity story. The question is whether rapid demand can broaden beyond one product family while profitability holds.

The setup now spans active electrical cables (AECs), optical digital signal processors, PCIe connectivity and silicon photonics. That wider portfolio gives investors more to track and raises the bar for execution.

CRDO Growth Now Reaches Beyond AECsCredo’s growth is no longer just an AEC story. Fiscal 2026 revenues reached $1.3 billion, up 206% year over year, as AI infrastructure ramps lifted demand across the product base.

AECs remain a key engine for in-rack and multi-rack AI connectivity. Yet management is also pointing to optical products, retimers and digital signal processors as larger contributors, helping frame Credo as an AI connectivity platform.

Lattice Semiconductor Corporation (LSCC - Free Report) , a peer in the semiconductor space, offers low-power field-programmable gate arrays used in communications, computing, industrial and other applications. It gives investors another infrastructure-linked chip name to compare against CRDO’s connectivity focus.

Credo Is Building a Bigger Optical EngineOptics has become the clearest next pillar. Credo completed the DustPhotonics acquisition in May 2026, adding silicon photonics PIC capabilities and strengthening its high-speed optical portfolio.

That deal fits with ZeroFlap optical transceivers and optical digital signal processors. Management expects optical revenues to exceed $600 million in fiscal 2027, with ZeroFlap optics, silicon photonics photonic integrated circuits and optical digital signal processors each contributing more than $100 million.
The optical opportunity also gives Credo more exposure to 800-gigabit and 1.6-terabit connectivity needs. FormFactor, Inc. (FORM - Free Report) , which provides advanced semiconductor test and measurement solutions, sits in a different part of the semiconductor ecosystem but remains relevant to data-infrastructure demand.

CRDO Execution Still Depends on Big CustomersCustomer concentration remains the main counterweight to the growth story. In the fourth quarter of fiscal 2026, four hyperscale customers each accounted for at least 10% of revenues.

The top three represented 34%, 27% and 16% of revenues. That concentration can magnify upside during deployment ramps because one large program can move revenues quickly.

The same structure can create volatility. If a major customer pauses a deployment, changes timing or adds suppliers, quarterly revenues can shift faster than the long-term opportunity would suggest.

Credo is working to diversify across hyperscalers, neo clouds and other customers. Still, management expects three to four customers to remain above 10% of revenues in the coming quarters.

Credo Margins Show Scale but Face TransitionsCredo’s profitability shows the leverage in the model. Fourth-quarter fiscal 2026 non-GAAP gross margin was 68.3%, while non-GAAP operating income reached $216.7 million.

Free cash flow was $177.5 million in the quarter. The company ended fiscal 2026 with $1.4 billion in cash, cash equivalents and short-term investments.

Margins may not move in a straight line. Non-GAAP operating expenses were $81.7 million in the fiscal fourth quarter and are expected to rise to $86-$90 million in the current quarter.

The mix shift toward newer optical products can also affect earnings cadence. Management expects fiscal 2027 non-GAAP gross margin to be broadly consistent with fiscal 2026, but higher spending and product transitions can make quarterly results less linear.

How CRDO Signals Fit the SetupThe bottom line is that Credo has a larger platform story, but investors still need confidence in customer ramps, optical execution and expense discipline. The stock’s growth profile depends on those factors holding together.

CRDO currently carries a Zacks Rank #1 (Strong Buy). That rank is consistent with a stock benefiting from favorable earnings estimate revision trends, which are central to the Zacks Rank framework.

The Style Scores add a more mixed layer. CRDO has a Momentum Score of A, Growth Score of B and VGM Score of C, pointing to favorable price action and growth characteristics but a less complete profile across all styles.

The weaker Value Score of F keeps the investment case rooted more in execution and growth confidence than in cheap valuation. For investors, CRDO remains a stock where the outlook hinges on whether optical scale and broader AI connectivity demand can offset concentration and transition risks.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways Credo's Q4 fiscal 2026 EPS beat estimates by 12.6%, while revenues rose 157% to $437M.Credo trades at 18.6X forward sales, above its sub-industry, sector and S&P 500 levels.Four hyperscalers each generated at least 10% of Q4 revenues, keeping volatility risk in focus. Credo Technology Group Holding Ltd (CRDO - Free Report) has already delivered the kind of share-price move that forces investors to revisit the original thesis.

Image Source: Zacks Investment Research

The question now is whether earnings growth, estimate revisions, margins and product expansion still support a premium valuation, or whether the stock has outrun the fundamentals.

CRDO Has the Earnings Backdrop Bulls WantCredo’s most recent quarter gave bulls plenty to work with. Fourth-quarter fiscal 2026 earnings of $1.16 per share beat the Zacks Consensus Estimate by 12.6%, while revenues of $437 million topped the consensus mark by 1.6%.

Revenues rose 157% year over year, driven by AI connectivity demand. Fiscal 2026 revenues reached $1.3 billion, more than tripling from fiscal 2025, while annual earnings per share climbed to $3.46 from 70 cents.

The estimate picture also remains supportive. The current fiscal-year earnings estimate has moved higher over the past four weeks, reinforcing the argument that the rally has not been based only on price momentum.

Credo Valuation Looks Rich but Not UnusualCRDO is not a bargain stock. Shares trade at 18.6X forward 12-month sales, above the Zacks sub-industry at 9.5X, the Zacks sector at 6.5X and the S&P 500 at 5.1X.

Image Source: Zacks Investment Research

That premium matters because it leaves less room for execution mistakes. Astera Labs (ALAB - Free Report) , another AI connectivity name, gives investors a related comparison point for how aggressively the market values companies tied to rack-scale AI infrastructure.

Still, Credo’s valuation is not outside its own historical range. The stock has traded as high as 29.4X forward sales over the past five years, with a median of 12X, suggesting investors are paying for growth leadership rather than a discounted entry point.

CRDO Has Real Cash and Margin SupportCredo’s bull case is stronger because profitability is already visible. Fourth-quarter non-GAAP gross margin was 68.3%, and non-GAAP operating margin reached 49.6%.

The full-year margin profile also improved. Fiscal 2026 non-GAAP gross margin was 68.1%, up 310 basis points, while non-GAAP operating margin expanded to 47.8%.

Cash generation adds another layer of support. Credo produced record operating cash flow of $182.2 million in the fourth quarter and free cash flow of $177.5 million, ending fiscal 2026 with about $1.4 billion in cash, cash equivalents and short-term investments.

CRDO Risks Can Change the Math FastThe main caution is customer concentration. Four hyperscalers each generated at least 10% of fourth-quarter fiscal 2026 revenues, with the top three customers accounting for 34%, 27% and 16%.

Credo still expects three to four customers to contribute more than 10% of revenues in upcoming quarters. That dependence can magnify volatility if a large buyer pauses, delays or rephases deployments.

Costs also need watching. First-quarter fiscal 2027 non-GAAP operating expenses are expected to reach $86 million to $90 million as product investments continue, and the company’s outlook assumes a tariff regime that management described as fluid.

Why CRDO Ratings Still Lean BullishThe bottom line is that CRDO remains a growth-led stock with fundamentals that still justify investor attention, even after a major rally. The setup is not low risk, but the earnings, revenue, margin and cash-flow profile gives bulls more than a momentum argument.

The stock currently carries a Zacks Rank #1 (Strong Buy), which points to favorable earnings estimate revision trends. Broadcom Inc. (AVGO - Free Report) , a larger AI networking and semiconductor peer, shows how deeply investors are focused on data-center connectivity across the chip landscape.

Credo also has a Momentum Score of A and a Growth Score of B, indicating favorable price action and growth characteristics. Its Value Score of F is the counterweight, making the stock better suited to growth-oriented investors than traditional value buyers.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Credo expects more than $600 million of optical revenue in FY2027, accelerating its transition beyond traditional AEC products. Fiscal 2026 revenue surged 206% to $1.34 billion while non-GAAP net income increased more than fivefold. Management guided for over 80% revenue growth in FY2027 while maintaining gross margins between 67% and 69%.

Credo Technology is rated buy, with a $295 price target and >37% upside, driven by robust growth and expanding optical offerings. Q4 revenues surged 157% YoY to $437M, with gross margin at 68.3% and non-GAAP operating margin at 49.6%, highlighting exceptional profitability. Customer concentration risk is moderating, with the top 3 customers now at 77% of revenue and neocloud clients expected to exceed 20% of the top line.

The tech sector's blistering run came to a halt on Wednesday as renewed strikes in Iran and a sour response to Broadcom's earnings weighed on sentiment. Despite a stellar Q2 with record revenue and margins, Broadcom sank 15% Thursday, dragging chip stocks lower. This long-awaited rotation presents an opportunity for semiconductor names that pair strong forward earnings growth with durable profitability.