Core Viewpoint - The data center market is experiencing rapid growth driven by digital transformation and the increasing demand for AI and ML technologies, benefiting companies like Credo Technology Group and Marvell Technology [2][3]. Group 1: Company Overview - Credo Technology Group specializes in high-speed connectivity solutions, particularly in Ethernet and Active Electrical Cables (AECs), which are gaining traction in data centers [4][5]. - Marvell Technology is a major player in the data center market, providing essential solutions such as PAM chips and digital signal processors that support AI infrastructure [9][10]. Group 2: Market Trends and Growth - The global data center market is projected to grow at a CAGR of 11.2% from 2025 to 2030, indicating strong demand for innovative data processing and storage solutions [2]. - Credo's AEC products have seen triple-digit sequential growth, highlighting their increasing adoption in data centers [4]. - Marvell's data center revenues reached $1.37 billion, marking a 78% year-over-year increase, with the segment accounting for 75% of total revenues [10]. Group 3: Product Innovations - Credo is expanding its product portfolio to include PCIe solutions, which are expected to significantly increase its total addressable market [5]. - Marvell's advanced optical interconnects and Co-Packaged Optics technology are enhancing data center efficiency and scalability [12]. Group 4: Financial Performance - For the third quarter of fiscal 2025, Credo reported a 154% year-over-year revenue growth, driven by demand from its largest hyperscale customer [8]. - Marvell's Electro-Optics products and Teralynx Ethernet switches have shown double-digit sequential growth, indicating strong market demand [11]. Group 5: Valuation and Estimates - CRDO is trading at a forward Price/Sales ratio of 10.30X, while MRVL is at 5.39X, suggesting a higher valuation for Credo [15]. - Analysts have significantly revised earnings estimates upwards for Credo, while Marvell's revisions have been more subdued [18][20]. Group 6: Investment Outlook - Both companies are well-positioned to benefit from the growing data center market, with Credo currently holding a Zacks Rank 1 (Strong Buy) and Marvell a Zacks Rank 2 (Buy) [21].

Core Viewpoint - The article emphasizes the importance of delivering structured, evidence-based investment ideas with a focus on generating alpha compared to the S&P 500 [1]. Group 1 - The investment strategy involves a generalist approach, analyzing and investing across various sectors with perceived alpha potential [1]. - The typical holding period for investments ranges from a few quarters to multiple years, indicating a long-term investment perspective [1]. - The article suggests reviewing the author's ratings history as a proxy for their investment skill and the effectiveness of their recommendations [1]. Group 2 - The author has no current stock or derivative positions in the companies mentioned but may initiate a long position in CRDO within the next 72 hours [2]. - The article expresses the author's personal opinions and is not influenced by compensation from any company mentioned [2]. - There is no business relationship between the author and the companies discussed, ensuring an independent viewpoint [2].

Group 1 - The current stock market panic has led to attractive valuations for many stocks, including Credo Technology Group Holding (NASDAQ: CRDO) [1] - Credo Technology Group has experienced a 50% year-to-date decline, making it a high-quality company with an appealing valuation [1] Group 2 - The article emphasizes the importance of equity research and analysis in identifying investment opportunities in the current market environment [1]

Core Viewpoint - The article emphasizes the rising importance of Digital Signal Processors (DSPs) in reshaping the future of optical communication, particularly in the context of AI-driven data centers and the transition from 100G to higher bandwidths like 1.6T [1][3]. Group 1: Importance of DSPs - DSPs are critical components in modern optical networks, converting analog signals to digital and encoding data for high-speed transmission using advanced modulation techniques [3]. - The demand for PAM4 DSPs is significantly increasing due to the construction of AI infrastructure, with projections indicating that the market for PAM4 and coherent DSPs will exceed $4 billion, maintaining a strong CAGR [3][19]. Group 2: Market Leaders - Marvell is a dual champion in the PAM4 and coherent DSP fields, benefiting from its strategic acquisition of Inphi, which expanded its product offerings in high-speed connectivity [5][7]. - Broadcom holds a strong market position in PAM4 DSPs, known for its low power consumption and high performance, particularly in AI clusters and large-scale data centers [11][12]. - Credo, established in 2008, is recognized for its low-power, high-cost-performance PAM4 DSPs, covering a range from 50G to 1.6T [12][13]. Group 3: Emerging Players - Alphawave Semi has transitioned from being known for high-speed SerDes IP to becoming a silicon product supplier, targeting high-speed PAM4 and coherent DSP markets with its 3nm technology [14]. - Retym, founded in 2021, focuses on programmable coherent DSP solutions for cloud and AI infrastructure, aiming to disrupt traditional suppliers with its innovative designs [17][18]. Group 4: Trends and Observations - The article notes that the connection bottleneck is becoming a core constraint in AI systems, highlighting the increasing significance of DSPs [19]. - There is a trend towards energy optimization in DSPs, with advanced process nodes like 3nm showing significant power advantages in 800G/1.6T modules [19]. - The future of DSP products is expected to integrate various functionalities, moving away from traditional discrete solutions [19]. - The competitive landscape is shifting, with traditional players facing complex relationships with customers, while new entrants like Retym and Alphawave promote open collaboration [19].

Core Viewpoint - Credo Technology Group Holding Ltd (CRDO) has experienced a stock decline of 9.1% over the past month, attributed to broader market sell-offs driven by escalating trade tensions and potential economic slowdowns. However, this market turbulence may present a buying opportunity for long-term investors [1][2]. Price Performance - CRDO's stock gained 7.8% recently, despite a general market decline, but remains down 58.6% from its 52-week high of $86.69. The stock's 9% decline is less severe compared to peers like Broadcom, Cirrus Logic, and Marvell Technology, which saw declines of 14.2%, 20.8%, and 19.8%, respectively [2][5]. Demand and Growth Drivers - The demand for high-performance connectivity solutions is increasing due to exponential data growth and the rapid proliferation of AI technologies. Credo specializes in high-performance serial connectivity solutions for the data infrastructure market, positioning it well for future growth [5][6]. - The Active Electrical Cables (AEC) product line has shown significant growth, with triple-digit sequential growth in Q3 of fiscal 2025, driven by increased adoption in data centers. AECs offer over 100 times improved reliability compared to traditional laser-based optical solutions, making them attractive for data center applications [6][7]. Product Portfolio Expansion - Credo is expanding its product portfolio to include PCIe solutions, which are expected to address the growing demand for AI scale-out and scale-up networks. This expansion is anticipated to significantly increase the company's total addressable market [8]. - The company has introduced the Lark Optical DSP family, designed for 800G optical transceivers, which is expected to enhance its offerings in the optical business. The Lark 800 and Lark 850 products are optimized for high-performance and low-power applications, particularly in AI data centers [9]. Customer Base Diversification - Credo is actively working to diversify its customer base, with 86% of its revenue in Q3 of fiscal 2025 coming from a single end customer. The company is in the qualification process with two additional hyperscalers and has achieved volume production with three others, which is expected to enhance revenue stability [11]. Financial Performance and Outlook - For Q3 of fiscal 2025, Credo reported revenues of $135 million, reflecting an 87% sequential increase and a 154% year-over-year increase, surpassing the Zacks Consensus Estimate by 12.5%. The company anticipates Q4 revenues between $155 million and $165 million, indicating a potential growth of 163.2% year-over-year [12][13]. - Analysts have shown optimism regarding CRDO's stock, with strong upward revisions for earnings estimates, reflecting confidence in the company's growth trajectory [13]. Valuation - CRDO is currently trading at a forward 12-month Price/Sales ratio of 9.29, which is higher than the Electronic-Semiconductors sector average of 5.3. This premium valuation is supported by the company's strong revenue growth prospects in the high-growth data center space [15][16]. Investment Recommendation - Given the improving financial performance and robust growth prospects, CRDO is considered a compelling investment opportunity despite competitive pressures and a high valuation. The stock's recent pullback from its 52-week high presents a potential buying opportunity [17].

Core Insights - Credo Technology Group (CRDO) has launched its Lark optical Digital Signal Processor (DSP) family, aimed at enhancing 800G optical transceivers [1][2] - The introduction of the Lark DSP family has resulted in a 3.8% increase in CRDO's share price, closing at $41.72 on April 1, 2025 [2] Product Overview - The Lark 800 is a high-performance, low-power DSP designed for fully retimed 800G transceivers, catering to the power and cooling needs of hyperscale AI data centers [2][6] - The Lark 850 is an ultra-low-power 800G Linear Receive Optics (LRO) DSP, consuming under 10W, making it suitable for AI-driven data environments [2] - The Lark DSPs utilize a fifth-generation architecture that ensures efficient data transmission in demanding hyperscale environments [3] Energy Efficiency and Adaptability - The Lark 800 features programmable power-saving modes, allowing for optimized power usage based on workload intensity [4] - It supports both single-mode and multi-mode architectures, providing flexibility for various optical transceiver applications [4][5] Market Demand and Client Base - The launch of the Lark DSP family addresses the growing need for high-speed, low-latency connectivity in evolving hyperscale data centers [6] - Credo has a strong client base, including over 20 blue-chip clients and major hyperscalers, which supports its market position [7] Financial Performance and Projections - For the third quarter of fiscal 2025, CRDO expects revenues between $115 million and $125 million, indicating a sequential growth of 67% at the midpoint [8] - The company anticipates double-digit sequential revenue growth from the third to the fourth quarter of fiscal 2025, with overall revenue growth exceeding 100% for fiscal 2025 [8] - Management expects operating expenses to grow at less than half the rate of revenues, leading to margin expansion, with long-term non-GAAP gross margins projected between 63% and 65% [9] Stock Performance - CRDO currently holds a Zacks Rank 1 (Strong Buy) and has seen its shares rally by 85.9% over the past year, contrasting with a 2.2% decline in the Zacks Electronics-Semiconductors industry [10]

Group 1 - Khaveen Investments is a Macroquantamental Hedge Fund managing a globally diversified investment portfolio across various asset classes, countries, sectors, and industries [1] - The investment approach combines top-down and bottom-up methodologies, integrating global macro, fundamental, and quantitative strategies [1] - The fund serves accredited investors globally, including high-net-worth individuals, corporations, associations, and institutions [1] Group 2 - The strategic focus of Khaveen Investments is on transformative fields such as Artificial Intelligence, Cloud Computing, 5G, Autonomous & Electric Vehicles, FinTech, Augmented & Virtual Reality, and the Internet of Things [1]

Market Overview - The Nasdaq surged 2.3% on Monday following President Trump's comments on "flexibility" regarding tariff plans, closing at its long-term 50-week moving average and above its 21-day moving average [1] - Trading was subdued on Tuesday as Wall Street awaited further developments on tariffs, with the uncertainty contributing to a stock market correction after a significant post-election rally [2] Investment Strategy - There may be near-term selling pressure; however, investors are encouraged to buy strong stocks that are trading below their highs, as buying into uncertainty can be a successful long-term strategy [3] - The earnings growth outlook remains strong, with expectations of interest rate cuts by the Federal Reserve in the latter half of 2025 [3] Stock Screening - Investors can utilize a Zacks screen to identify Zacks Rank 1 (Strong Buy) stocks, which historically outperform the market [4][6] - The screening parameters include a Zacks Rank of 1, positive current quarter estimate revisions over the last four weeks, and top broker rating changes [7][8] Company Spotlight: Credo Technology Group Holding Ltd (CRDO) - Credo is a rapidly growing tech firm focused on high-speed connectivity solutions, projected to grow its revenue by 121% in FY25 to $671 million, up from $106 million in FY22 [9] - The company is expected to expand its adjusted EPS by 600% from $0.09 to $0.63 in FY25, with a further 71% increase anticipated next year [10] - Credo's stock has increased by 250% over the past three years, significantly outperforming the tech sector, although it has seen a 42% decline from its January peaks [11] - The stock has found support at its 200-day moving average, with nine out of ten brokerage recommendations being "Strong Buys" and trading approximately 60% below its average Zacks price target [12]

Group 1 - The article discusses the correction in technology stocks following a significant increase late last year, suggesting it may be an opportune time to identify companies that were previously considered too expensive for investment [1] - The author expresses a personal interest in stock trading and indicates a potential interest in initiating a long position in CRDO within the next 72 hours [2] - The article emphasizes that past performance does not guarantee future results and that no specific investment advice is being provided [3]

Core Insights - WPG Americas Inc. has formed a strategic partnership with Credo Technology Group to enhance its offerings in high-performance, low-power connectivity solutions [1][3] - The collaboration aims to meet the growing demand for high-speed data transmission across various industries, including hyperscale data centers, telecommunications, and cloud computing [3][4] Company Overview - WPG Americas Inc. is headquartered in San Jose, CA, and is part of WPG Holdings, a $27.4 billion global distributor of semiconductors and electronic components [4] - Founded in November 2007, WPG Americas focuses on providing total solutions and innovative technologies to its diverse customer base [4] Credo Technology Group - Credo specializes in high-speed connectivity solutions designed to address the increasing bandwidth demands in modern networking environments [2][5] - The company's product offerings include optical DSPs, linecard gearboxes, retimers, MACsec PHYs, Chiplets, and Active Electrical Cables, known for their performance and energy efficiency [2][5] - Credo's mission is to break bandwidth barriers in the data infrastructure market, focusing on improving power efficiency and reliability as data rates increase [5]