Credo (CRDO) Crashes 13.4% on Profit-Taking; Investors Shun 'Buy' Reco

We recently published 10 Stocks Hammered Harder than Wall Street. Credo Technology Group Holding Ltd. (NASDAQ:CRDO) is one of the worst performers on Tuesday.

Credo Technology fell by 13.44 percent on Tuesday to finish at $129.75 apiece as investors resorted to profit-taking following the previous day’s gains.

The share price dropped despite investment firm Stifel reiterating a “buy” recommendation for its stock at a price of $160 apiece.

According to Stifel, Credo Technology Group Holding Ltd. (NASDAQ:CRDO), its optimism was based on the company’s launch of its 800G HiWire ZeroFlap AECs to deliver highly reliable interconnect for artificial intelligence (AI) backend networks.

With improved reach and signal integrity, the HiWire ZF AECs deliver zero soft link flaps to support the lossless backend RDMA network that AI clusters are built on. The 800G AECs benefit from the newest advances in liquid cooling, allowing the 7-meter length to enable full host-to-switch connectivity in leading GPU clusters.

“Credo’s new HiWire ZeroFlap AECs enable a step function improvement in GPU cluster reliability by eliminating the soft link flaps frequently seen with legacy optics,” said Credo Technology Group Holding Ltd. (NASDAQ:CRDO) Head of AEC Product Ameet Suri.

“Further, when compared to legacy optics, Credo’s HiWire AECs offer power savings of up to 14W per link and cost savings of up to $1,000 per GPU,” he noted.

While we acknowledge the potential of CRDO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.