Group 1 - AI infrastructure includes advanced chips and essential components like cables and connection technologies for high-speed data transmission [1] - The analysis aims to identify profitable and undervalued investment opportunities primarily in the U.S. market [1] - The approach combines macro-economic analysis with real-world trading experience to create a balanced portfolio of U.S. securities [1]

Group 1: Market Overview - The U.S. equity markets have experienced significant volatility due to mixed signals from Washington, particularly regarding tensions with Iran [1] - Crude oil prices remain highly volatile amid ongoing negotiations, with an amicable solution appearing fragile [2] Group 2: Investment Strategies - Investors are turning to momentum stocks as a strategy to achieve sustained profits during market fluctuations [2] - Momentum investing is based on the principle of "buying high and selling higher," capitalizing on established trends [3] Group 3: Momentum Stock Screening - A screening strategy has been developed to identify stocks with long-term price momentum and short-term pullbacks [4] - The screening parameters include selecting the top 50 stocks based on a 52-week price change, then identifying the bottom 10 performers over the past week [5][6] Group 4: Selected Momentum Stocks - Micron Technology, Inc. has seen a stock surge of 289.9% over the past year but experienced a 20% drop in the last week, holding a Momentum Score of A [9][11] - Credo Technology Group Holding Ltd has increased by 127.3% in the past year, with a recent decline of 9.9%, also holding a Momentum Score of A [9][13] - Vermilion Energy Inc. has risen 61.1% annually but has slipped 7.8% recently, with a Momentum Score of B [9][14]

Core Insights - Credo Technology Group Holding Ltd. (CRDO) is advancing in the high-speed interconnect sector essential for modern AI infrastructure, focusing on the adoption of Active Electrical Cables (AECs) and expanding its Integrated Circuit (IC) portfolio, which includes optical digital signal processors and retimers [1][2] Product Developments - The introduction of the Cardinal 1.6T optical digital signal processor family, built on 3-nanometer technology and designed for massive AI fabrics, addresses bandwidth, latency, and power requirements [3][4] - The Robin optical digital signal processor family includes 800G and 400G devices aimed at AI-optimized transceivers, featuring enhanced signal integrity and lower power consumption [5][6] - The launch of 800G ZeroFlap optical transceivers is targeted at AI networks, enhancing efficiency, scalability, and reliability across data center fabrics [7][8] Strategic Moves - The acquisition of CoMira Solutions adds link layer, error correction, and security intellectual property to Credo's offerings, enhancing its capabilities in Ethernet, ESUN, UALink, and PCIe [9][10] - The Blue Heron 224G AI scale-up retimer supports multi-protocol environments and is designed for reliability in dense scale-up designs [12][13] - A partnership with TensorWave aims to power next-generation AMD-based AI clusters, positioning Credo's solutions within advanced AI infrastructure [14] Market Position and Risks - Credo's revenue is significantly tied to a concentrated customer base, with the top three customers accounting for 39%, 32%, and 17% of revenue in Q3 of fiscal 2026, which introduces execution risks [16][17] - The company maintains a long-term non-GAAP gross margin framework of 63% to 65%, but margins may fluctuate due to product and customer mix shifts [17]

Core Insights - Credo Technology Group Holding Ltd (CRDO) is experiencing rapid growth due to increased demand from hyperscalers for high-speed, power-efficient connectivity solutions, particularly Active Electrical Cables (AECs) and an expanding integrated circuit (IC) portfolio related to AI data center interconnects [1] Financial Performance - Fiscal 2025 revenue reached $436.8 million, representing a 126.3% increase from fiscal 2024, primarily driven by AEC adoption [3] - The latest quarter reported revenue of $407 million, which is up 201.5% year over year and 51.9% sequentially [3] - Management projects fiscal 2026 revenue to be approximately $1.3 billion, with over 50% growth expected into fiscal 2027, aiming for nearly $2 billion [4] Guidance and Execution - For Q4 of fiscal 2026, management forecasts revenue between $425 million and $435 million, with non-GAAP gross margins expected to be between 64% and 66% [5] - The company emphasizes the importance of meeting guidance and maintaining profitability amid operational challenges as growth accelerates [6] Product Portfolio and Growth Opportunities - AEC adoption is the primary revenue driver, with the IC portfolio expanding to include optical digital signal processors and retimers, which are essential as data center speed requirements increase [7] - New product offerings such as ZF optics, Active LED Cables, and OmniConnect gearboxes are expected to enhance long-term growth potential in AI connectivity [8] Customer Concentration Risks - Customer concentration poses a significant risk, with the top 10 customers accounting for approximately 90% of revenue, and one customer alone representing 67% of fiscal 2025 revenue [9] - In Q3 of fiscal 2026, the top three customers contributed 39%, 32%, and 17% of revenue, indicating a reliance on a few key clients [10] Margin and Operating Expenses - Gross margins are subject to variability due to changes in product and customer mix, with a long-term non-GAAP gross margin target of 63% to 65% [12] - Operating expenses in Q3 of fiscal 2026 exceeded guidance due to increased R&D activity, which may impact operating leverage as new programs ramp up [13] Tariff Considerations - The fiscal Q4 outlook assumes the current tariff regime, with potential changes in tariffs affecting pricing, sourcing, and margin planning [14] Market Position and Valuation - CRDO currently holds a Zacks Rank 1 (Strong Buy), with a 25.6% increase in the consensus estimate for fiscal Q4 earnings per share over the last 60 days [15] - The stock trades at 9.1X forward 12-month sales, higher than the Zacks sub-industry average of 7.5X and the sector average of 5.86X, but below its five-year median of 11.79X [16]

Core Insights - Credo Technology Group Holding Ltd (CRDO) is experiencing significant growth driven by the demand for AI data center connectivity, particularly through active electrical cables (AECs) which are becoming a key revenue driver [1][5][10] - The company is expanding its product offerings with optical digital signal processors (DSPs) and retimers, which support faster connections with lower power consumption [1][11] Business Overview - Credo's platform is centered around serializer/deserializer (SerDes) and DSP technology, providing a diverse range of connectivity products including AECs, optical DSPs, retimers, SerDes chiplets, and SerDes IP licensing [2] - The product portfolio targets high-speed links across copper and optical interconnects, focusing on Ethernet and PCIe speeds ranging from 100G to 1.6T, emphasizing power efficiency and signal integrity [3] Market and Customer Base - Credo serves a variety of end markets including hyperscalers, cloud providers, original equipment manufacturers, optical module makers, enterprise networking, and high-performance computing, overlapping with other semiconductor companies like Broadcom and Marvell [4] Growth Drivers - AECs are becoming standard for intra- and rack-to-rack connections, supporting higher-speed links while maintaining power and signal integrity, which is crucial for AI applications [6][10] - Revenue more than doubled from fiscal 2024 to fiscal 2025, reaching $436.8 million, with the latest quarter's revenue at $407 million, indicating rapid growth in AEC deployments [7][8] Future Projections - Management anticipates tripling revenue from fiscal 2025 to fiscal 2026, with continued growth expected into fiscal 2027, indicating a robust scaling story [9] - The roadmap extends into fiscal 2028, with new products like PCIe Gen6 AECs and retimers expected to contribute to revenue growth [15][16] Financial Health - Credo maintains a strong profitability framework with a long-term non-GAAP gross margin target of 63%–65%, and liquidity is solid with approximately $1.3 billion in cash and cash equivalents [17][18]

Core Insights - Stock screening is a valuable tool for investors to navigate the vast array of investment options available, similar to using a grocery list to efficiently find items in a store [1][11] - The screening process can be complex and overwhelming, as different investors have varying preferences and strategies [2][12] Screening Parameters - Screening parameters serve as the essential components for investors, allowing them to filter out irrelevant information and tailor their searches according to specific investing styles [3] Value Investing - Value investors can utilize parameters such as Price-to-Earnings (P/E) ratio, Price-to-Sales (P/S) ratio, and Price-to-Book (P/B) ratio to identify stocks that are attractively valued [4] Momentum Investing - Momentum investing focuses on stocks that have experienced recent buying pressure, with parameters including price change over the last month, average volume, and price relative to the 52-week high-low range [5] Growth Investing - Growth-oriented strategies target companies expected to achieve above-average sales and earnings growth, with key parameters including last year's earnings and sales growth rates, as well as expected growth rates for the current and next year [6][7] Income Investing - Income-focused investing emphasizes dividend-paying stocks, which are often more stable and represent mature companies sharing profits with shareholders [8] - Parameters for identifying dividend-paying stocks include current dividend yield and the 5-year historical dividend growth rate [9]

Core Insights - Credo Technology Group (CRDO) and Vertiv (VRT) are positioned as key players in the AI data center boom, with Credo providing high-speed connectivity components and Vertiv offering power and cooling systems essential for AI data centers [1][2] Company Overview - Credo specializes in high-speed connectivity components, including active electrical cables and high-speed SerDes technology, which are critical for AI workloads and GPU clusters [4] - Vertiv focuses on power and cooling solutions, including liquid cooling systems, which are increasingly necessary due to the high power consumption of AI servers [6] Stock Performance - Both Credo and Vertiv have shown remarkable stock performance, with gains exceeding 1,000% over the past three years [2] - Credo's stock has recently fallen 30% in 2026, making it an attractive buy-the-dip opportunity due to ongoing demand for its products [3] - Vertiv's stock has increased by 60% this year, despite a recent pullback, indicating strong market confidence [5] Financial Projections - Credo's annual sales are projected to grow by 204% in fiscal 2026 to $1.33 billion, with further growth expected to 52% in the following year, reaching $2.02 billion [8] - Vertiv's sales are expected to rise by 34% this year to $13.68 billion, with a forecasted increase of 24% in FY27 to $17.02 billion [10] Earnings Growth - Credo's FY26 EPS is projected to be $3.30, reflecting a 371% increase from the previous year, with further growth to $4.60 per share in FY27 [9] - Vertiv's FY26 EPS estimates have increased by 17% over the last two months, with projections of $6.15 for the current year and $8.10 for the next [17] Valuation Metrics - Credo and Vertiv are trading at forward P/E multiples of 31X and 44X, respectively, which are considered reasonable given their growth potential [11] - Credo's valuation is particularly attractive as it is close to the S&P 500 average of 22X and below the industry average of 36X [11] EPS Revisions - Credo's EPS estimates have increased by 19% for FY26 and 28% for FY27 over the last 60 days, indicating positive market sentiment [15] - Vertiv's EPS estimates have also seen a significant rise, with a 25% increase for FY27 [15]

Core Insights - Growth investing remains popular, focusing on companies expected to achieve above-average earnings and revenue growth, which often leads to outperformance [1] - Increased volatility is a consideration for investors, as unforeseen circumstances can impact growth forecasts [1] Company Summaries Teradyne (TER) - Teradyne manufactures testing equipment for chips, with significant growth in AI data center chips driving demand [3] - The stock has increased by 65% this year, maintaining a Zacks Rank 1 (Strong Buy) due to a positive EPS outlook [3] - EPS is projected to grow by 29% in FY26 and 16% in FY27, with sales expected to rise by 50% and 30% respectively [4] Roku (ROKU) - Roku offers a range of streaming devices and services, enabling content publishers to monetize audiences [6] - In FY25, Roku reported 145.6 billion total streaming hours, a 15% year-over-year increase, and achieved record free cash flow [7] - EPS is expected to grow by 255% in FY26 and 55% in FY27, with sales growth rates of 16% and 13% for the same periods [9] Credo Technology (CRDO) - Credo Technology provides solutions that support AI, cloud computing, and hyperscale networks, benefiting from the AI trend [12] - The latest quarterly results showed revenues of $407 million, up over 200% year-over-year, with a massive total addressable market [15] - EPS is forecasted to grow by 370% in FY26 and 40% in FY27, with sales growth rates of 200% in FY26 and 50% in FY27 [15]

Group 1 - Nvidia's CEO Jensen Huang emphasized the continued importance of copper in server racks, impacting optical component companies negatively [1] - Credo Technology, which produces high-speed copper-based active electrical cables, reported a significant revenue increase of 201% year-over-year, reaching $407 million [2][4] - The market reaction indicates a shift in perception regarding the role of copper versus optics in AI infrastructure [1][3] Group 2 - Credo's stock has seen a 99% increase over the past year, despite a 30% decline in the current year, reflecting strong financial momentum [4] - The company trades at a high valuation of 43.8 times forward earnings, significantly above the sector average of 21.6 times [6] - In Q3 fiscal 2026, Credo's revenue grew by 51.9% quarter-over-quarter and 201.5% year-over-year, with a gross margin of 68.5% on a GAAP basis [6][7]

Core Insights - Credo Technology Group Holding Ltd. (CRDO) and Marvell Technology, Inc. (MRVL) are semiconductor companies focused on high-speed connectivity solutions essential for AI-driven data centers [1][2] - Both companies are positioned to benefit from increasing AI-powered demand, but they present different financial performance, outlooks, and valuations for investors [2] CRDO: Fast-Rising Player - CRDO's Active Electrical Cables (AECs) business is central to its growth, with management indicating that AEC adoption is still in early stages, suggesting significant growth potential as AI infrastructure expands [3][4] - The company reported substantial year-over-year growth from four domestic hyperscalers, with three contributing over 10% to total revenues, indicating strong adoption of its AEC solutions [4] - CRDO is also focusing on its integrated circuit (IC) portfolio, including retimers and optical DSPs, with its PCIe retimer program on track for design wins in fiscal 2026 [5] - Recent product launches, such as the Cardinal family of 3nm low-power 224G/lane optical DSPs, are expected to enhance CRDO's market share [6] - The Robin optical DSP family, designed for scalable AI networks, includes 800G and 400G devices optimized for AI workloads [7] - CRDO is expanding its market potential with new product families, including Zero-Flap optics and Active Linear Cables (ALCs), and has launched next-generation 800G optical transceivers [8] - The company maintains a strong cash position of $1.3 billion, allowing for strategic M&A and continued investment in product innovation [9] MRVL: Established Player - Marvell has a diversified product portfolio, including custom ASICs and data center switches, with a strategic focus on the data center market driving growth [12] - Data center revenues reached $6 billion, a 46% year-over-year increase, with the segment contributing 74% to the fourth quarter of fiscal 2026 revenues [13] - The company has raised its fiscal 2027 revenue forecast to $11 billion, driven by stronger cloud capital expenditures and accelerating bookings [13] - The data center business is expected to grow 40% year over year in fiscal 2027, with interconnect revenues projected to grow over 50% [14] - Marvell's strength in high-speed interconnects is supported by increasing demand for 800-gig products and strong bookings for 1.6T solutions [15] - The company is divesting non-core assets while pursuing acquisitions to enhance its capabilities, including the recent acquisition of Celestial AI, which focuses on scale-up optical interconnect technology [17] Price Performances & Valuations - In the past month, CRDO has lost 14.5%, while MRVL has gained 12.1% [20] - CRDO is trading at a forward 12-month price/sales ratio of 9.79, higher than MRVL's 6.77 [22] - Analysts have revised earnings estimates upwards by 18.7% for CRDO and 5.6% for MRVL over the past 60 days [24][26] - CRDO holds a Zacks Rank 1 (Strong Buy), while MRVL has a Zacks Rank 3 (Hold), indicating CRDO may be a better investment pick at the moment [27]