Chip designers Nvidia (NVDA 1.33%) and Broadcom (AVGO 3.50%) have been two of the biggest beneficiaries of the artificial intelligence (AI) infrastructure build-out. Yet in 2026, a much smaller semiconductor company, Credo Technology (CRDO 5.19%), is leaving both behind in share price gains.
Image source: Getty Images.
Shares of Credo are up about 74% year to date as of June 13, while Nvidia and Broadcom have gained nearly 10% and 11%, respectively. Here’s why Credo may sustain its outperformance in the coming months.
Credo is becoming a prominent networking player
Credo provides high-speed, energy-efficient connectivity solutions that help GPUs work together efficiently inside AI data centers. Since large AI clusters can include tens of thousands of GPUs, even minor connection failures can slow deployments, reduce GPU utilization, and increase downtime costs. Credo helps resolve this problem by making AI networks more reliable, easier to scale, and more power-efficient.
Today’s Change
(-5.19%) $-13.47
Current Price
$245.94
Key Data Points
Market Cap
$48B
Day’s Range
$241.56 – $258.10
52wk Range
$77.79 – $270.21
Volume
139.8K
Avg Vol
7.8M
Gross Margin
69.43%
Credo’s active electrical cables (AECs) help connect servers and server racks inside AI data centers in a power-efficient and reliable way. In fact, the company says its ZeroFlap AECs are up to 1,000 times more reliable and still more power-efficient than traditional optical network connections.
Credo’s financials are also impressive. In its fiscal 2026, which ended May 2, revenues rose 206% to $1.3 billion, while non-GAAP earnings per share soared 392% to $3.46.
Growing optical portfolio
Management is guiding for Credo’s revenue to grow by more than 80% in its fiscal 2027, helped by a sharp ramp-up in its optical connectivity business. The company expects this portfolio to generate more than $600 million in revenue.
AI networks increasingly need to move data at much higher speeds, including 800G, 1.6T, and eventually beyond. Traditional copper-based AECs are well-suited for short connections inside and between nearby server racks. However, optical connectivity is better suited for longer distances because it can move data faster with lower signal loss. That makes Credo’s optical capabilities increasingly important. The company’s recent acquisition of DustPhotonics strengthened its optical portfolio by adding silicon photonics technology, which can enable faster, more power-efficient optical connections. The deal also gave Credo better control over its optical technology, helping it to detect connection problems earlier and improve network performance.
The shift toward 1.6T networks could also increase Credo’s revenue opportunity because customers will need higher-bandwidth, more advanced connectivity products. Hence, management expects that transition in the tech sector to support higher average selling prices for Credo’s products.
However, certain risks cannot be ignored. Credo already trades at a rich valuation of nearly 42 times forward earnings. The company is also exposed to significant customer concentration risk. In the fourth quarter, four customers accounted for 34%, 27%, 16%, and 10% of its total revenues, respectively.
But the trend is improving. Management said its fourth-largest customer in the fourth quarter was a new one, suggesting that it is slowly diversifying its customer base. Neocloud providers could also become a more meaningful opportunity as they build AI infrastructure for model developers, enterprises, sovereign AI, inference, and agentic workloads.
Hence, while Credo is riskier than Nvidia or Broadcom, it is also a smaller and faster-growing bet on AI connectivity and optical networking.
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