Just noticed Credo pulled back after that solid run, and honestly the setup looks pretty interesting right now. The stock had a nice 88% year but has been pretty quiet lately—down about 19% from the December peak. That kind of dip on a quality chipmaker usually catches my attention.

Let me break down why I'm watching this one. Credo's fundamentals are actually firing on all cylinders right now. Their latest quarterly numbers (Q2 ended Nov 1, 2025) show $268M in revenue—nearly 4x year-over-year—with roughly $128M in net income. That's not normal growth, that's the kind of acceleration you see when a company is hitting its stride. They're also sitting on about $814M in cash, which gives them real runway.

The AI and data center angle is what's driving this. Their ZeroFlap Optical Transceivers are becoming essential infrastructure for managing these massive data clusters. As AI deployment accelerates, demand for this stuff stays strong. Plus they just acquired Hyperlume back in September 2025, which opens up new product lines around LED cables. Credo's positioning itself as a full-scale AI infrastructure play now, not just a niche component supplier.

One thing people worry about is customer concentration—their top client was 42% of revenue last quarter. But there are signs the customer base is diversifying. More importantly, their dominance in active electrical cables gives them real pricing power, which helps with margins as costs rise.

Now, the valuation isn't cheap. P/E of 134 and P/S of 63 are steep numbers. But analysts expect earnings to more than quadruple over the next year, which actually makes sense given the growth trajectory. Wall Street consensus is pretty bullish—14 out of 15 analysts rating it positively, with a $220 price target (that's roughly 44% upside from here).

So yeah, after the pullback, this looks like a decent spot to build a position if you believe in the AI infrastructure thesis. The fundamentals support it, the market tailwinds are real, and Credo's got the products to capture that opportunity.