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5 AI Infrastructure Stocks With Triple-Digit Returns YTD to Buy for Q4
ZACKS· 2025-10-09 13:56
Key Takeaways Five AI infrastructure stocks delivered triple-digit returns year to date amid strong demand. CRDO, WDC, CLS, MU and UI each hold potential to grow more in Q4. Surging AI, cloud and data-center investments are fueling record revenues and product expansion.The artificial intelligence (AI) saga, supported by the massive growth of cloud computing and data centers, is yet to unfold fully. The momentum of the AI infrastructure segment is in top gear this year. The AI space remains rock solid suppor ...
CRDO Deepens Ties With Hyperscalers: Key to Next Growth Phase?
ZACKS· 2025-09-18 14:11
Core Insights - Hyperscaler partnerships are crucial for Credo Technology Group Holding Ltd.'s rapid growth, enabling market share expansion through the adoption of active electrical cables (AEC) and optical solutions for next-gen AI data centers [1][2] - The demand for AI-driven data center infrastructure has led to a significant revenue increase for Credo, with a 274% year-over-year growth in Q1 of fiscal 2026 [2][8] - Management anticipates that all major hyperscalers will adopt AECs due to their higher reliability, lower power consumption, and reduced system costs compared to optical solutions [3][8] Company Performance - Credo's revenue growth is driven by contributions from multiple hyperscalers, with three hyperscalers each accounting for over 10% of total revenues in the recent quarter [2][8] - The company expects further diversification as additional hyperscalers ramp up their contributions in the coming quarters [2] - Credo's shares have increased by 144.6% year-to-date, outperforming the Electronics-Semiconductors industry's growth of 36.2% [10] Market Position and Competition - The electronics semiconductor market is competitive, dominated by established players like Marvell Technology and emerging companies like Astera Labs [4] - Marvell is well-positioned to capture a larger share of the market due to its strong demand environment and multigenerational custom engagements with hyperscalers [5][6] - Astera Labs is focusing on advanced AI infrastructure and sees significant growth potential in purpose-built solutions for hyperscalers [7][9] Financial Estimates - The Zacks Consensus Estimate for Credo's earnings for fiscal 2026 has been revised upward significantly over the past 60 days, indicating positive market sentiment [12] - Current earnings estimates for Q1 and Q2 of fiscal 2026 are $0.48 and $0.49 respectively, with significant upward revisions noted [13]
CRDO Guides 120% Growth in Fiscal 2026: Will the Momentum Sustain?
ZACKS· 2025-09-17 13:46
Core Insights - Credo Technology Group Holding Ltd (CRDO) is experiencing robust demand from hyperscalers and data center operators due to accelerated AI infrastructure investments, with Q1 fiscal 2026 revenues increasing by 31% sequentially and 274% year-over-year to $223.1 million, surpassing management's guidance of $185 million to $195 million [1][11] Revenue Growth and Projections - For fiscal 2026, the company expects mid-single-digit sequential revenue growth, leading to approximately 120% year-over-year growth, with previous expectations of revenues exceeding $800 million, indicating over 85% year-over-year growth [2] - The AEC product line is a key growth driver, showing healthy double-digit sequential growth in the last reported quarter, with increased demand expected from rack-to-rack deployments [4][11] Product and Market Position - Credo operates at the intersection of AI and data center build-outs, offering active electrical cables (AEC), optical Digital Signal Processors (DSP), and PCIe retimer solutions that meet the demand for high-speed, low-power connectivity [3] - The optical DSP segment is maintaining strong momentum, with expectations to double optical revenues in the current fiscal year, while PCIe retimer solutions are gaining traction, with anticipated design wins in 2025 and production revenues in 2026 [7][11] Competitive Landscape - The competitive environment is intensifying, with Credo facing competition from major semiconductor companies like Broadcom and Marvell Technology, as well as new entrants like Astera Labs [9] - Despite the challenges, Credo's system-level approach provides a competitive advantage, owning the entire stack of SerDes IP, Retimer ICs, and system-level design, which enhances innovation cycles and cost efficiency [8] Stock Performance and Valuation - CRDO shares have increased by 38.5% in the past month, outperforming the Electronics-Semiconductors industry's growth of 14.9% [16] - The forward 12-month Price/Sales ratio for CRDO is 27.4, significantly higher than the sector's multiple of 9.62 [18] - The Zacks Consensus Estimate for CRDO earnings for fiscal 2026 has been revised upwards significantly over the past 60 days, indicating positive market sentiment [19]
How Does Credo's System-Level Strategy Provide an Edge in the AI Era?
ZACKS· 2025-08-29 16:52
Core Insights - Credo Technology Group Holding Ltd (CRDO) is establishing a strong position in the AI era through a system-level strategy that integrates the entire solution stack, providing a competitive edge in next-generation data centers [1][10] - The company's mastery of SerDes technology, combined with a customer-centric approach, enhances its competitive advantage in latency, reach, and power efficiency [2][10] - Credo's PILOT software platform improves time-to-market and system monitoring, further expanding its value proposition [2][3] System-Level Strategy - Credo's holistic approach accelerates time-to-market and fosters innovation, positioning the company favorably as hyperscale workloads and AI-optimized architectures evolve [2] - The strong adoption of Active Electrical Cables (AEC), Optical Digital Signal Processors (DSPs), and retimers demonstrates the effectiveness of the system-level strategy [4][10] - Demand for AECs is increasing, particularly for ZeroFlap AECs, which offer over 100 times greater reliability than traditional laser-based solutions [4] Optical Business Growth - Credo's optical business is experiencing strong momentum, especially with its 3nm 200G-per-lane optical DSP, which supports port speeds up to 1.6 Tbps [5] - The company anticipates continued growth in PCIe and Ethernet retimers, with design wins expected in 2025 and revenues projected in 2026 [5] - The shift towards 100G-per-lane solutions and rising demand for system-level expertise in AI-optimized architectures bolster the outlook for retimers [5][6] Financial Projections - For fiscal 2026, Credo expects revenues to exceed $800 million, indicating over 85% year-over-year growth, with non-GAAP net margin approaching 40% [7][10] - Non-GAAP operating expenses are projected to rise at less than half the revenue growth rate, showcasing operational discipline [7] Market Competition - Credo faces increasing competition from semiconductor giants like Broadcom and Marvell Technology, which are also capitalizing on the AI wave [8] - Broadcom reported a 46% year-over-year growth in AI revenues, reaching $4.4 billion, while Marvell posted a 58% year-over-year increase in revenues to $2.006 billion [9][12] Stock Performance - CRDO shares have surged 258% over the past year, significantly outperforming the Electronics-Semiconductors industry's growth of 41.3% [13] - The forward 12-month Price/Sales ratio for CRDO is 26.02, which is higher than the sector's multiple of 9.02 [14]
Buy 3 AI Infrastructure Stocks Backed by Past Month's Solid Momentum
ZACKS· 2025-07-17 14:31
Industry Overview - The artificial intelligence (AI) infrastructure sector is experiencing significant growth, with a bullish demand scenario and a projected capital expenditure increase of 46% year-over-year, reaching $325 billion by 2025 [3][4]. - The total addressable global sovereign AI market is estimated to be $1.5 trillion, indicating vast opportunities for investment and development in various fields such as healthcare, energy, and cybersecurity [4]. Company Highlights Credo Technology Group Holding Ltd. (CRDO) - Credo Technology is focused on high-performance serial connectivity solutions, particularly in AI server markets, with its Active Electrical Cables (AEC) gaining traction due to their reliability [9][10]. - The company has achieved significant milestones, including an 800-gig transceiver DSP design win and the introduction of ultra-low-power optical DSPs, which are expected to enhance industry standards [11][14]. - CRDO anticipates a revenue growth rate of 85.8% and earnings growth of over 100% for the current fiscal year, with a 37% improvement in earnings estimates over the last 60 days [14]. Jabil Inc. (JBL) - Jabil is benefiting from strong momentum in AI-powered data center infrastructure and has a diversified product portfolio that enhances its resilience against macroeconomic disruptions [15][16]. - The company has a projected revenue growth rate of 5.6% and earnings growth of 17.8% for the next fiscal year, with an 8.4% increase in earnings estimates over the past 30 days [17]. Lumentum Holdings Inc. (LITE) - Lumentum designs and manufactures optical technologies that support AI applications, with a focus on high-speed telecommunications and data centers [18][20]. - The company has a strong collaboration with NVIDIA in developing photonic solutions, which are crucial for AI infrastructure [21]. - LITE expects a revenue growth rate of 32.8% and earnings growth of over 100% for the current fiscal year, with a slight improvement in earnings estimates recently [21].
3 Must-Buy Technology Bigwigs With Solid Earnings Estimate Revisions
ZACKS· 2025-07-14 13:45
Core Insights - Wall Street continues its upward trend, primarily driven by the technology sector's adoption of generative AI, despite some challenges in early 2025 [2] - Three technology companies have seen significant earnings estimate revisions, indicating positive market expectations [3] Company Summaries Dell Technologies Inc. (DELL) - DELL has experienced strong demand for AI servers, securing $12.1 billion in AI server orders, which has created a robust backlog [5][9] - The company is expanding its cloud services and AI infrastructure through its APEX platform, which offers multi-cloud solutions [7] - DELL's expected revenue and earnings growth rates for the current year are 8.7% and 16%, respectively, with a recent 0.1% improvement in earnings estimates [8] Jabil Inc. (JBL) - JBL benefits from momentum in capital equipment and AI-powered data center infrastructure, with an 8.4% increase in next-year EPS estimates [9][12] - The company maintains high free cash flow, indicating efficient financial management and operational efficiency [11] - Expected revenue and earnings growth rates for JBL are 5.8% and 17.8%, respectively, for the next fiscal year [12] Credo Technology Group Holding Ltd. (CRDO) - CRDO specializes in high-performance serial connectivity solutions, with its Active Electrical Cables (AEC) gaining traction in the data center market [14] - The company has seen a 37% increase in earnings estimates over the last 60 days, with expected revenue and earnings growth rates of 85.8% and over 100% for the current year [19] - CRDO's product lines, including PCIe retimers and Ethernet retimers, are experiencing robust demand, particularly in AI server applications [17][18]
Credo Technology Surges 144% in 3 Months: Is the Stock Still a Buy?
ZACKS· 2025-07-09 14:15
Core Insights - Credo Technology Group Holding Ltd (CRDO) has experienced a significant stock appreciation of 144.2% over the past three months, driven by AI proliferation and demand for energy-efficient connectivity solutions, with shares trading near a 52-week high of $95.71 [1][10] - The company is expected to continue its growth trajectory, projecting revenues to surpass $800 million in fiscal 2026, indicating over 85% year-over-year growth [12][10] Group 1: Business Performance - CRDO's Active Electrical Cables (AEC) product line has shown double-digit sequential growth in fiscal Q4 2025, gaining traction in the data center market [3] - The AECs offer over 100 times improved reliability compared to laser-based optical solutions, making them increasingly attractive for data center applications [4] - The optical business, particularly Optical Digital Signal Processors (DSPs), has also been a key growth driver, achieving revenue targets and expanding customer diversity [5] - CRDO's revenues for fiscal 2025 reached $436.8 million, a 126% year-over-year increase, with Q4 revenues surging 179.7% year-over-year to $170 million [9] Group 2: Product Innovations - CRDO's 3-nanometer 200-gig-per-lane optical DSP is expected to facilitate the industry's transition to higher lane speeds [6] - The PCIe retimers and Ethernet retimers business is witnessing robust performance, particularly in AI server applications, driven by demand for 50 gig and 100 gig per lane Ethernet solutions [7][8] Group 3: Financial Outlook - For Q1 fiscal 2026, CRDO expects revenues between $185 million and $195 million, reflecting a 12% sequential increase at the midpoint, with a projected non-GAAP gross margin of 64-66% [12] - The company anticipates non-GAAP net margin to approach nearly 40% due to operating expenses growing at less than half the revenue growth rate [12] Group 4: Market Position - CRDO's stock performance has outpaced peers like Broadcom, Marvell, and Cirrus Logic, which gained 57.9%, 36.2%, and 26.9% respectively [15][20] - The company is trading at a forward 12-month Price/Sales ratio of 18.96, significantly higher than the sector average of 8.60 [21] Group 5: Investment Recommendation - Given the strong fundamentals and positive market outlook, CRDO is positioned as a strong buy, with rising investor confidence and a differentiated product offering [23][24]
Credo Technology Skyrockets 50% in a Month: Time to Buy the Stock?
ZACKS· 2025-06-06 15:01
Core Insights - Credo Technology Group Holding Ltd (CRDO) stock has increased by 50.2% over the past month, outperforming the Electronic-Semiconductors sector's growth of 18.8% and the broader Computer and Technology sector's growth of 10.3% [1][8] - The company's fiscal Q4 revenues surged 179.7% year over year to $170 million, driven by strong product sales and AI demand [3][8] - CRDO expects fiscal 2026 revenues to exceed $800 million, indicating an 85% year-over-year growth [11][8] Financial Performance - CRDO's fiscal 2025 revenues rose 126% year over year to $436.8 million, with significant contributions from product sales [3][8] - The company anticipates first-quarter fiscal 2026 revenues between $185 million and $195 million, representing a 12% increase at the midpoint [11] - Non-GAAP gross margin is projected to be between 64-66%, with operating expenses estimated at $54 million to $56 million [11] Product and Market Dynamics - The Active Electrical Cables (AEC) product line has shown double-digit sequential growth, particularly in the data center market, due to its reliability compared to traditional optical solutions [4] - CRDO's Optical Digital Signal Processors (DSPs) are gaining momentum, with expectations for increased customer diversity and revenue growth [5][8] - The demand for PCIe and Ethernet retimers is robust, particularly in AI server applications, indicating a strong market position for CRDO [9][10] Competitive Positioning - CRDO's stock performance has significantly outpaced competitors like Broadcom, Marvell, and Cirrus Logic, which have seen gains of 22.3%, 14.2%, and 3.4%, respectively [15] - The company is trading at a forward 12-month Price/Sales ratio of 18.03, higher than the sector average of 8.21, indicating a premium valuation [16] Analyst Sentiment - Analysts have revised earnings estimates upwards in the past 60 days, reflecting increased confidence in CRDO's growth trajectory [12] - The company maintains a Zacks Rank 1 (Strong Buy), supported by strong business momentum and positive guidance [18]
CRDO Tanks 33% in 3 Months: Should You Hold the Stock or Make an Exit?
ZACKS· 2025-05-09 14:50
Core Viewpoint - Credo Technology Group Holding Ltd (CRDO) has experienced a significant stock decline of 33.3% over the past three months, which is notably higher than the Electronic-Semiconductors industry's decline of 16.4% and the broader Computer and Technology sector's decline of 11.5% [1][12][21] Price Performance - CRDO's stock gained 6.1% recently, closing at $51.39, but remains 41% below its 52-week high of $86.69 [4] - The stock's performance raises concerns among investors regarding their investment strategies [4] Market Demand and Growth Drivers - The demand for high-performance serial connectivity solutions is increasing due to exponential data growth and rapid AI proliferation, which is favorable for Credo [5] - Credo's Active Electrical Cables (AEC) product line has shown triple-digit sequential growth, driven by adoption in the data center market [6] - The company is expanding its product portfolio to include PCIe solutions, which will address the growing demand for AI scale-out and scale-up networks [7] Product Innovations - CRDO launched the Lark Optical DSP family, designed for 800G optical transceivers, which enhances performance and power efficiency for AI data centers [8] - There is strong customer interest in CRDO's PCIe and Ethernet retimers, particularly for AI server scale-out networks, with demand expected to exceed $1 billion by 2027 [9] Financial Outlook - For Q4 fiscal 2025, CRDO expects revenues between $155 million and $165 million, indicating a growth of 163.2% year-over-year [10] - In Q3 fiscal 2025, CRDO reported revenues of $135 million, up 87% sequentially and 154% year-over-year, driven by demand from its largest hyperscale customer [11] Challenges and Risks - CRDO faces challenges due to its heavy reliance on AI-related infrastructure and hyperscale cloud market spending, which are subject to cyclical fluctuations [12] - The company reported a 16% sequential increase in non-GAAP operating expenses, primarily due to higher headcount, which could pose a risk if revenue growth does not keep pace [14] - A significant portion of revenue (86%) comes from a single end customer, creating customer concentration risk [15] Competitive Landscape - CRDO's stock decline of 33.3% is steeper than peers like Broadcom and Cirrus Logic, which declined 11.6% and 6.5%, respectively [16] - The company competes with semiconductor giants such as Broadcom and Marvell Technology, which may exert competitive pressure [16] Valuation - CRDO's stock is trading at a forward 12-month Price/Sales ratio of 12.92, indicating a stretched valuation compared to the Electronic-Semiconductors sector's multiple of 6.97 [18] - In comparison, Broadcom trades at a forward P/S multiple of 14.46, while Cirrus Logic and Marvell Technology are at 2.76 and 5.71, respectively [20] Investment Recommendation - While CRDO is well-positioned in the AI-driven connectivity space, concerns regarding customer concentration, competitive pressures, and valuation suggest a cautious approach [21]