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StockPickers DUO
@stockpickers_duo · Sep 15

🔥 We just bought Credo $CRDO

We've been following Credo for a while and after the latest drop we decided to open a position.

What do we like about the company?

Revenue for the last quarter was $479 million, up 115% year over year

Non-GAAP net income of $236 million, +140% YoY

Guidance for next quarter is $525–535 million in revenue. The company is benefiting from the growth of AI data centers and the need for faster connectivity between chips and servers (Securities and Exchange Commission)

In our view, connectivity is a part of AI infrastructure that isn't talked about as much as GPUs, but as data centers grow its importance will continue to rise.

Of course, the risk remains higher valuation and high market expectations, so it's definitely not a risk-free stock. But we see further room for growth and that's why we decided to get in.

What do you think about Credo? Do you have $CRDO in your portfolio, or does it still seem too expensive at the current valuation? 👇

A community member's personal view, not investment advice. Community Guidelines

MS
Martin Sedláček @martinsedlacek Sep 16

Credo makes sense to me mainly as a less visible part of AI infrastructure. The numbers are growing great, but at the current valuation, I think the biggest question is how much more growth the market has already priced in.

TK
Tomáš Král @tonn_06 Sep 16

Not entirely cheap, but the investment thesis is interesting.

What is your investment horizon?

What target price do you ideally aim for?

SD
StockPickers DUO @stockpickers_duo Sep 16

Thanks! Our horizon is more like 3–5 years; we don't want to make it a short-term trade. We don't have a fixed target, but if Credo maintains its current growth pace and continues gaining share in AI connectivity, the area around 250–300 USD makes sense to us. Rather than the price itself, we'll watch revenue growth, margins, and customer concentration developments. After the latest results, new analyst price targets range roughly from 235 to 310 USD.

JS
Jiří Šebesta @jirisebesta Sep 16

Aren't you afraid of the AI sector slowing down, a certain market saturation, and overall a decline in positive sentiment regarding AI?

PG
Pavel Gregor @pavelgregor1 Sep 16

It seems to have already been reflected in this stock recently...

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