Credo Technology Group Holding Ltd (CRDO): A Bull Case Theory

 We came across a bullish thesis on Credo Technology Group Holding Ltd on Nikhs Substack. In this article, we will summarize the bulls’ thesis on CRDO. Credo Technology Group Holding Ltd's share was trading at $138.83 as of October 10th. CRDO’s trailing and forward P/E were 207.82 and 81.30 respectively according to Yahoo Finance. '

Credo Technology is rapidly evolving from a hardware-focused cable and chip supplier into a critical operational intelligence layer for AI infrastructure, with its Pilot software turning individual deployments into self-optimizing systems. The transformation mirrors Cisco’s 1995 shift from selling routers to controlling the internet’s operating system: while the hardware is visible, the real value lies in the platform that creates network effects and operational lock-in. Evidence of this shift is visible in Credo’s customer concentration dynamics, where revenue previously dominated by one hyperscaler has diversified among three major clients, signaling platform adoption rather than commodity purchasing.

Each deployment feeds operational intelligence back into the system, improving performance for all users and generating high switching costs. Credo’s universal, protocol-agnostic approach and end-to-end control—from SerDes IP to system-level optimization—allow the company to expand from intra-rack to rack-to-rack connectivity, creating scalable, software-like economics with high margins and asymmetric upside.

Financially, revenue jumped from $170M to $223M while gross margins remained at 67.6% and net margins at 44.1%, highlighting operating leverage consistent with platform dynamics. Patent settlements with ecosystem partners reinforce Credo’s strategy of controlled openness, enabling broader adoption without sacrificing competitive advantages.

If the Pilot platform continues to embed operational intelligence at scale, the company could achieve 45–50% revenue growth with net margins approaching 50%, potentially driving the stock toward $375–450 per share. Even in a more conservative scenario, strong platform adoption and hardware execution could support 35–40% growth and sustainable margins. Credo’s trajectory presents a rare opportunity to invest in the emerging coordination layer of AI infrastructure, where the real value lies in intelligence embedded within critical systems rather than the physical components themselves.

Previously we covered a bullish thesis on Credo Technology Group Holding Ltd (CRDO) by Nikhs in May 2025, which highlighted strong earnings growth, with revenue up 154% and margins improving due to AI connectivity solutions concentrated with one major hyperscaler. The company's stock price has appreciated approximately by 118% since our coverage. The thesis still stands as CRDO evolves into an operational intelligence platform. Deep Value Returns shares a similar view but emphasizes patient investing through near-term volatility.

Credo Technology Group Holding Ltd is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held CRDO at the end of the second quarter which was 41 in the previous quarter. While we acknowledge the potential of CRDO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.