Group 1: Nvidia and Market Trends - Nvidia stock reached all-time highs, contributing to the Nasdaq-100-tracking QQQ ETF achieving new records [1] - Wall Street's optimism is driven by cooling Middle East tensions and expectations of a cease-fire agreement between Israel and Iran [1][2] - The technology sector is experiencing a rally, with investors encouraged to buy strong technology stocks benefiting from the artificial intelligence boom [2] Group 2: Rockwell Automation (ROK) - Rockwell Automation is focused on industrial automation and digital transformation, providing solutions across Intelligent Devices, Software & Control, and Lifecycle Services [4] - ROK is integrating advanced AI and robotics technologies into its automation solutions, enhancing manufacturing efficiency [6] - The company exceeded Q2 FY25 earnings estimates and provided positive guidance, projecting a 16% increase in adjusted earnings for FY26 [7][8] Group 3: Credo Technology Group (CRDO) - Credo Technology designs high-speed connectivity solutions that are in high demand due to investments in artificial intelligence [14] - The company reported a 126% revenue growth for fiscal 2025, with adjusted earnings rising from $0.09 to $0.70 [16] - CRDO is projected to grow adjusted earnings by 111% in fiscal 2026, with revenue expected to increase from around $200 million in FY24 to nearly $1 billion in FY27 [18]

Core Insights - Credo Technology Group Holding Ltd (CRDO) is experiencing significant growth, with fiscal 2025 revenues reaching $436.8 million, a 126% year-over-year increase, driven by high demand for energy-efficient connectivity solutions in AI data centers [1][8] - The company anticipates revenues for fiscal 2026 to exceed $800 million, indicating more than 85% year-over-year growth, supported by the transition to 100 gig per lane solutions and increased adoption of Optical DSPs [5][8] Company Performance - In the fourth quarter of fiscal 2025, CRDO's revenues surged 179.7% year-over-year to $170 million, primarily due to strong performance in HiWire Active Electrical Cables and customer momentum in PCIe and Ethernet retimers [1][8] - For the first quarter of fiscal 2026, CRDO projects revenues between $185 million and $195 million, suggesting a 12% increase at the midpoint [5] Product Portfolio - CRDO's focus on low-power, high-bandwidth interconnects, including HiWire AECs, Optical DSPs, and SerDes solutions, positions it well within the AI infrastructure market [2][3] - The company is witnessing growing interest in its PCIe retimers and Ethernet retimers, which are crucial for scale-out networks in AI servers [3] Market Dynamics - The demand for AI infrastructure is driving CRDO's growth, with hyperscaler customers increasingly seeking advanced connectivity solutions [1][5] - Competitors like Marvell Technology and Broadcom are also capitalizing on the AI data center trend, with Marvell's data center revenues increasing by 76% year-over-year and Broadcom projecting a 21% year-over-year revenue increase for the third quarter of fiscal 2025 [6][7] Valuation Metrics - CRDO's shares have surged 209.4% over the past year, significantly outperforming the Electronics-Semiconductors industry's growth of 20.8% [9] - The company is currently trading at a price/book ratio of 25.25, which is higher than the sector's average of 9.62 [10]

Core Viewpoint - The article discusses the volatile market conditions in 2025, highlighting the performance of top stock picks and the impact of tariffs and geopolitical events on market dynamics [7][9][19]. Market Overview - The US equity market experienced significant fluctuations due to tariff announcements, leading to a major correction in April 2025, with the S&P 500 dropping approximately 15% from its 52-week high [9][10]. - A barbell investment approach was recommended to diversify portfolios during market corrections, focusing on stocks with strong fundamentals and good dividend yields [10][13]. Stock Performance - The top 10 stocks recommended at the beginning of 2025 saw a performance swing from over 20% gains to below 20%, reflecting a nearly 40% change during the volatile period [15][16]. - By mid-2025, many of these stocks rebounded as fear subsided and investors returned to fundamentals [16]. Economic Indicators - Inflation rates showed a surprising decrease, with core CPI at 0.1% for May, and there is speculation about potential interest rate cuts by the Federal Reserve in September [22][23]. - The recession risk appears less severe than previously anticipated, with GDP growth projected to exceed 2% annualized after a decline in Q1 [23][31]. Top Stock Picks - **Barclays (NYSE: BCS)**: A diversified bank with a market cap of $62 billion, ranked 12 out of 691 in financial institutions, offering a dividend yield of 2.47% and a forward EPS growth rate of 28% [80][81]. - **Prudential (NYSE: PUK)**: Based in Hong Kong, this insurance company ranks 1 out of 19 in its industry, with a forward dividend yield of 1.89% and a long-term EPS growth rate of 17% [86][89]. - **FinVolution (NYSE: FINV)**: A fintech company with a market cap of $2.2 billion, ranking 7 out of 691 in financials, showing a 255% operating cash flow growth rate [93][94]. - **Power Solutions International (NASDAQ: PSIX)**: A small-cap company with a market cap of $1.23 billion, ranked number one in the industrials sector, with a one-year return of 835% [97][99]. - **New Gold (NYSE: NGD)**: Focused on gold, silver, and copper exploration, with an operating cash flow growth rate of 56% [107][110]. - **Gold Fields Limited (NYSE: GFI)**: A diversified mining company with a 37% EPS forward long-term growth rate, ranking 5 in the materials sector [111][113]. Investment Strategies - The article emphasizes a data-driven approach to stock selection, utilizing a GARP (Growth at a Reasonable Price) strategy that combines growth, value, profitability, and momentum metrics [40][42]. - The new PRO Quant Portfolio offers a higher frequency of stock ideas, designed for active investors, with a focus on global stocks across various market caps [59][64].

Core Insights - The article compares two semiconductor companies, Credo Technology Group Holding Ltd. (CRDO) and Marvell Technology, Inc. (MRVL), focusing on their roles in the AI-driven data center market [2][3][21] Company Overview - CRDO specializes in high-speed connectivity solutions, particularly in Ethernet and Active Electrical Cables (AECs), which are crucial for data centers [5][10] - MRVL has a diversified product portfolio that includes custom ASICs, data center switches, and 5G chips, with a strong focus on AI infrastructure [10][11] Financial Performance - CRDO's fiscal 2025 revenues rose 126% year over year to $436.8 million, with fourth-quarter revenues surging 179.7% year over year to $170 million [5][10] - MRVL's data center revenues increased 76% year over year to $1.44 billion, driven by demand for custom AI silicon and electro-optics products [11][12] Growth Drivers - CRDO's AECs are gaining traction due to their reliability, with a product line that is expected to remain a growth engine [5][6] - MRVL's growth is supported by solid demand for its storage and networking chips, particularly from the 5G infrastructure and data center markets [10][11] Market Trends - The shift from copper to optical connectivity in AI infrastructure presents significant growth opportunities for MRVL's Co-Packaged Optics technology [13] - Both companies are positioned to benefit from the increasing reliance on high-performance solutions in the rapidly expanding AI-server market [8][12] Competitive Positioning - CRDO's integrated system-level approach provides a competitive edge, allowing for faster innovation cycles and cost efficiency [6] - MRVL's collaboration with NVIDIA to integrate NVLink Fusion into its custom silicon platform enhances its capabilities in developing next-generation AI infrastructure [12] Stock Performance and Valuation - Over the past month, CRDO and MRVL have registered gains of 38.2% and 20.2%, respectively [17] - CRDO is trading at a forward 12-month price/sales ratio of 17.40X, significantly higher than MRVL's 7.36X [18] Analyst Estimates - Analysts have revised CRDO's bottom line estimates upward significantly in the past 60 days, indicating strong growth expectations [20] - MRVL has seen marginal upward estimate revisions, reflecting steady performance [20] Investment Recommendation - CRDO currently holds a Zacks Rank 1 (Strong Buy), while MRVL has a Zacks Rank 3 (Hold), suggesting that CRDO may be a better investment pick at this time [21]

Group 1 - Ethernet is becoming the essential infrastructure for modern AI data centers, positioning Credo Technology Group Holding Ltd favorably to capitalize on this trend [1] - Credo Technology Group is a fabless designer based in San Jose, indicating a focus on design rather than manufacturing, which may enhance operational efficiency [1] Group 2 - The article highlights the increasing importance of AI tools and applications, suggesting a growing market for companies involved in AI infrastructure [1]

Group 1 - Credo Technology Group Holding Ltd. (CRDO) has reached a key level of support, with its 50-day simple moving average crossing above its 200-day simple moving average, indicating a "golden cross" [1] - A golden cross is a technical chart pattern that suggests a bullish breakout may be imminent, typically involving the 50-day and 200-day moving averages [1][2] - CRDO shares have increased by 22.2% over the past four weeks, and the company holds a 1 (Strong Buy) rating on the Zacks Rank, indicating potential for further upward movement [3] Group 2 - The earnings expectations for CRDO have improved, with four upward revisions and no downward changes in the past 60 days, leading to an increase in the Zacks Consensus Estimate [3] - Investors are encouraged to consider adding CRDO to their watchlist due to the significant technical indicator and positive earnings estimate trends [3]

Core Viewpoint - The article discusses the author's investment insights and portfolio, emphasizing a unique perspective on stock analysis and investment opportunities [1]. Group 1 - The author expresses a beneficial long position in AVGO shares, indicating confidence in the company's future performance [2]. - There is no current investment or plans to invest in CRDO, highlighting a cautious approach towards this particular stock [3]. - The analysis is intended for informational purposes, encouraging investors to conduct their own research before making investment decisions [3]. Group 2 - The article does not provide specific recommendations or advice regarding investment suitability for individual investors [4]. - It clarifies that past performance does not guarantee future results, underscoring the inherent risks in stock investments [4]. - The author’s views may not represent the broader opinions of Seeking Alpha, indicating a diversity of perspectives within the platform [4].

Core Insights - Credo Technology Group Holding Ltd (CRDO) has set a revenue guidance of over $800 million for fiscal 2026, a significant increase from $437 million in fiscal 2025, reflecting a 126% year-over-year growth driven by data growth and AI demand [1][10] Group 1: Product Performance - The Active Electrical Cables (AEC) product line has shown double-digit sequential growth in fiscal Q4, primarily due to its adoption in the data center market, with ZeroFlap AECs offering over 100 times improved reliability compared to laser-based optical solutions [2] - Credo's integrated approach, owning the entire stack of SerDes IP, Retimer ICs, and system-level design, allows for faster innovation cycles and cost efficiency, positioning AECs as a growth engine [3] - The optical business has met revenue targets for fiscal 2025, with expectations for increased customer diversity across various applications to further accelerate revenue growth [4] Group 2: Market Demand and Competition - The demand for PCIe retimers and Ethernet retimers is strong, particularly for AI server scale-out networks, with robust performance reported in fiscal Q4 and fiscal 2025, driven by 50 gig and 100 gig per lane Ethernet solutions [5] - However, increasing competition from semiconductor giants like Broadcom and Marvell Technology may pose challenges to CRDO's growth trajectory [6] Group 3: Industry Comparisons - Broadcom expects third-quarter fiscal 2025 revenues of $15.8 billion, a 21% year-over-year increase, with AI semiconductor revenues projected to grow 60% year-over-year to $5.1 billion [7] - Marvell Technology anticipates revenues of $2 billion for the second quarter of fiscal 2026, indicating a 57% year-over-year growth, driven by demand for AI-driven custom silicon [8] Group 4: Financial Metrics - CRDO shares have gained 6.5% year-to-date, slightly underperforming the Electronics-Semiconductors industry's growth of 6.8% [11] - The forward 12-month price/sales ratio for CRDO is 15.16, significantly higher than the sector's multiple of 8.21 [13] - The Zacks Consensus Estimate for CRDO earnings for fiscal 2026 has seen a notable upward revision over the past 60 days [14]

Investment Rating - The report maintains an "Outperform" rating for the communication industry, indicating an expected performance exceeding the benchmark index by over 10% [1]. Core Insights - Strong performance from companies like Broadcom, Ciena, and Credo is driving optimism in the AI computing sector, with Broadcom reporting a 20% year-over-year revenue increase to $15 billion and a net profit of $5 billion, up 134% [3][16]. - Ciena's latest quarterly revenue reached $1.1 billion, a 24% increase year-over-year, with its network platform business growing by 38% [4][17]. - Credo's revenue for the recent quarter was $170 million, reflecting a 26% quarter-over-quarter growth and a 180% year-over-year increase, with expectations for continued growth in the upcoming fiscal quarter [5][18]. - China Mobile's 2025 ordinary optical cable procurement results show a balanced bidding environment, with a total procurement scale of 3.21 million kilometers, indicating a rational competitive landscape in the domestic optical fiber and cable industry [6][19]. - The satellite internet sector is gaining traction, with companies like Starcloud planning to launch satellites equipped with advanced computing capabilities, highlighting the strategic importance of space computing in the coming years [8][20]. Summary by Sections Industry Dynamics - The report highlights the robust demand for AI semiconductors, with Broadcom's AI revenue growing by 46% to $4.4 billion, and expectations for further growth to $5.1 billion in the next quarter [3][16]. - Ciena's focus on developing pluggable coherent optical modules is indicative of the strong demand for DCI network infrastructure in North America [4][17]. - Credo's expanding customer base and its competitive edge in AEC chip capabilities position it favorably for future growth opportunities [5][18]. Market Performance - The overall market saw an increase during the week of June 2-6, 2025, with the Shenwan Communication Index rising by 5.27% [9][21]. - The top-performing sectors included optical modules, liquid cooling, and connectors, with respective weekly gains of 11.9%, 8.8%, and 7.9% [9][21]. Company Recommendations - The report suggests focusing on companies in various segments, including: - AI computing modules: NewEase, Zhongji Xuchuang, Tianfu Communication, etc. - Optical fiber and cable: Zhongtian Technology, Changfei Fiber Optics, Hengtong Optic-Electric, etc. - Satellite computing: Shanghai Hanxun, Tianyin Machinery, etc. [9][21].

Summary of Credo Technology Group (CRDO) Conference Call Company Overview - **Company**: Credo Technology Group (CRDO) - **Industry**: Semiconductor and Networking Technology - **Key Products**: High-performance, low-power SerDes technology, Active Electrical Cables (AECs), Linear Resistive Optics (LROs), Retimers, Gearboxes, MaxEck cables - **Growth**: Company has grown from a startup to over 500 employees and went public in January 2022 [2][3] Key Points and Arguments Revenue Growth and Market Position - **Revenue Growth**: AEC cable revenue has grown almost 10x since the IPO, surprising many in the industry [4][21] - **Competitive Moat**: Credo's competitive advantage lies in its deep and broad SerDes IP portfolio, application-specific mindset, and vertical integration from product definition to production [5][8][9] Innovation and Technology - **Three Tiers of Innovation**: Credo focuses on SerDes, integrated circuit design, and system-level solutions, which contribute to its competitive moat [6][7] - **Reliability Focus**: In AI applications, reliability has become the top priority for customers, with Credo's AECs being over 100 times more reliable than laser-based optics [12][14] Customer Engagement and Market Expansion - **Customer Diversification**: The company is expanding its footprint with leading hyperscalers, with plans to ramp up engagement with new customers [22][30] - **Market Opportunities**: There are significant opportunities in rack-to-rack connectivity and the adoption of AECs across various network applications [24][29] Future Outlook - **Scale Up vs. Scale Out**: The company sees a 10x opportunity in scale-out and another 10x in scale-up, indicating a massive potential market [33] - **Protocol Evolution**: Credo is positioned to support various protocols, including PCIe and NVLink, and is focused on delivering universal solutions [36][52] Optical DSP and Competitive Landscape - **Optical DSP Growth**: The optical DSP segment has also seen significant growth, with a focus on low-cost, low-power solutions [63] - **CPO Discussion**: Credo anticipates that CPO (Copper Passive Optical) will take off at higher-level switching, but reliability remains a core concern [68][71] Manufacturing and Capacity - **Manufacturing Flexibility**: The company has successfully ramped up production capacity for AECs and is well-positioned to meet future demand [83][84] Market Trends and Challenges - **Copper vs. Optical**: Credo believes that copper will continue to play a significant role in networking, despite the growth of optical solutions [91][92] - **Industry Growth**: The networking market is projected to grow significantly, with competitors like Broadcom reporting substantial year-on-year growth [96] Additional Important Insights - **Customer Engagement**: Credo's approach to working closely with customers to innovate and enhance product features is a key differentiator [15][17] - **Future Protocols**: The company is monitoring the evolution of protocols like NVLink Fusion and SUE, which could impact market dynamics [78][80] This summary encapsulates the key insights from the Credo Technology Group conference call, highlighting the company's growth trajectory, competitive advantages, and future opportunities in the semiconductor and networking technology industry.