Is Credo (CRDO) One of the Must-Buy AI Stocks to Invest In?

Credo Technology Group Holding Ltd (NASDAQ:CRDO) is one of the must-buy AI stocks to invest in. On December 16, BofA cut its price target on Credo Technology Group Holding Ltd (NASDAQ:CRDO) to $200 per share from $240. The investment bank kept a Buy rating on the stock.

According to BofA, 2026 is the halfway point in an 8- to 10-year process of overhauling old IT systems to handle faster AI tasks, like processing huge amounts of data quickly. This upgrade journey, noted the analysts, is driven by the need for more powerful AI, but it’s not without bumps. For instance, stocks in this space might stay volatile because investors are closely watching whether AI investments pay off and how big tech companies manage their spending.

On the brighter side, BofA noted that challenges from greater scrutiny of AI returns and hyperscaler cash flows could be balanced out by two factors. First, quicker progress in building large language models (the brains behind AI chatbots). And, second, specialized AI factories, which would boost demand for companies like Credo.

Meanwhile, on December 11, Barclays maintained a Buy rating on Credo with a $220 price target. Like their counterparts at BofA, Barclays’ analysts cited optimism about Credo’s ability to capture more market share as hyperscalers build out AI factories and upgrade their data centers as the key factor in their decision.

Credo Technology Group Holding Ltd (NASDAQ:CRDO) is a semiconductor company that develops high-speed connectivity solutions for data infrastructure. The company’s portfolio of optical and electrical interconnect products enables efficient data transfer within AI data centers.

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. This article is originally published at Insider Monkey.