Forget Palantir, another AI stock is up 180% in 2025

Core Insights - Credo Technology is experiencing rapid growth in the AI sector, outperforming Palantir Technology in terms of revenue and stock performance due to increasing demand for high-speed active electrical cables (AECs) [1][4] - The company's revenue surged 272% year-over-year to $268 million, with earnings per share (EPS) of 67 cents, exceeding Wall Street expectations by 35% [4] - Credo's stock has risen 180% year-to-date, significantly higher than Palantir's 126% increase [4][5] Company Performance - Credo Technology reported impressive quarterly sales and profit growth, leading to a 10% increase in its stock price following the earnings announcement [4] - The growth is primarily driven by demand from hyperscalers for AECs, which are essential for connecting high-end servers in data centers [5] - Major customers of Credo Technology represent over 90% of its sales, with each contributing more than 10% of quarterly revenue [5] Industry Dynamics - The demand for AECs is rising as they serve as critical components in AI data centers, facilitating faster communication between powerful AI chips [2][6] - AECs are more power-efficient, consuming up to 50% less power than traditional active optical cables while maintaining necessary speeds [6] - AECs offer advantages in distance and performance, being thinner and more flexible than copper cables, which are limited in distance and prone to signal degradation [6]