Credo Technology's stock has risen over 70% this year: Re-evaluating the logic of AI infrastructure "connection layer"

The AI investment narrative in 2026 is undergoing a significant paradigm shift. As the market's pursuit of GPU computing chips turns into a red ocean, capital is shifting its focus to the deeper layers of AI infrastructure—specifically, the connection layer. In this transition, a company named Credo Technology (CRDO) has entered the mainstream spotlight with astonishing gains.

As of June 17, 2026, Credo Technology Group Holding (NASDAQ: CRDO) closed at $239.18, up 4.24% for the day, with an intraday high of $261.87. According to Yahoo Finance tracking data as of June 17, CRDO's year-to-date return has reached 73.28%, while the S&P 500 index has only increased by 8.39% in the same period. Using the intraday high of $259.41 on June 15 as a reference, the year-to-date gain once reached 80.28%. The 52-week increase is 212.80%, and the three-year return is as high as 1,282.86%. This stock, which only listed on NASDAQ in January 2022, has now climbed to a total market value of approximately $46.5 billion.

In 2026, a year when the overall growth stocks performed relatively flat, CRDO's return elasticity far exceeded most AI sector targets. More importantly, its rise is not merely driven by sentiment but is based on solid financial data and clear industry logic.

Earnings Surge: A "Better-than-Expected Yet Selling-Off" Earnings Report

On June 1, 2026, Credo released its Q4 and full-year financial results for fiscal year 2026 (ending May 2, 2026). The numbers themselves are nearly impeccable: Q4 revenue reached $437 million, up 157% year-over-year, and up 7.4% quarter-over-quarter, surpassing analyst expectations of $432.5 million. GAAP net profit was $169.1 million, Non-GAAP net profit was $226.7 million, and Non-GAAP diluted earnings per share (EPS) reached $1.16, well above the market consensus of $1.02.

On an annual basis, fiscal year 2026 revenue exceeded $1.3 billion, a 206% increase year-over-year; Non-GAAP net profit soared to $662 million, more than five times higher than the previous year. The company held approximately $1.4 billion in cash and short-term investments at the end of the quarter, with free cash flow of $177.5 million this quarter.

However, after the earnings release, CRDO's stock price fell about 14% in after-hours trading, and by the end of the day, it closed down approximately 4.2%. The market was not dissatisfied with the performance but had differing views on the "expectations" themselves—the company provided guidance of $465 million to $475 million in revenue for Q1 FY2027, higher than Wall Street consensus of $461.3 million, but some investors had already priced in higher expectations. This phenomenon of "better-than-expected yet declining" is not uncommon among high-growth stocks and essentially reflects the challenge of expectation management faced by high-valuation targets.

Optical Interconnects: The Next System Bottleneck in AI Computing Expansion

Credo’s core business revolves around high-speed connectivity solutions. Its product portfolio includes Active Electrical Cables (AEC), Optical Digital Signal Processors (DSP), Retimers, and SerDes intellectual property licensing. Based on Serializer/Deserializer (SerDes) and DSP technologies, the company provides end-to-end connection solutions for data center infrastructure, from copper interconnects to optical interconnects.

To understand CRDO’s value, one must first grasp the systemic bottleneck shift occurring in AI data centers. Industry observations from Computex 2026 clearly indicate that the bottleneck in AI data centers is shifting from "single-point compute performance" to "data movement efficiency and system connectivity." After the continuous expansion of GPUs, HBM, and advanced packaging, the system bottleneck will further concentrate on the connection efficiency between different computing resources, cabinets, and even data center campuses.

This trend is directly reflected in the fact that optical modules related to InfiniBand architecture have become one of the most strained components in the AI hardware supply chain, with lead times extending to 8-9 months. As the core hardware for converting electrical signals to optical signals, optical modules are an indispensable infrastructure for AI compute expansion.

Credo is a key beneficiary of this trend. CEO Bill Brennan explicitly stated during the earnings call—"Without our small chips, AI clusters cannot be built." While this may be an exaggeration, it highlights Credo’s critical positioning in the interconnection of AI clusters. The company's high-speed copper and optical interconnect products support transmission rates up to 1.6T.

Strategic Upgrade of Optical Business: From Copper Cables to Optical Interconnects

Credo’s most promising growth engine comes from its optical business. In May 2026, the company completed the acquisition of DustPhotonics for $750 million in cash plus 920k CRDO shares. This acquisition adds silicon photonics (Silicon Photonics) and photonic integrated circuit (PIC) capabilities to Credo. DustPhotonics brought design orders for 800G and 1.6T, along with a technology roadmap toward 3.2T.

Management expects that optical DSP, silicon photonics PIC, and ZeroFlap Optics product lines will each contribute over $100 million in revenue in FY2027, with a combined total exceeding $600 million. For the entire FY2027, the company projects revenue growth of over 80%, with about half of the growth coming from optical products and the other half from copper cables.

In terms of customer structure, Credo’s main clients include hyperscale data center operators such as Microsoft, Amazon, and Meta. The top four customers contributed at least 10% of revenue each in Q4, with the largest single customer accounting for 34%. This customer concentration reflects Credo’s deep penetration into the supply chains of leading cloud providers but also poses potential concentration risks.

Valuation and Institutional Perspectives: Has High Growth Been Fully Priced In?

CRDO’s current valuation remains high. As of June 18, the TTM P/E ratio is approximately 98.45x, and the P/B ratio is 22.53x. With a market cap of $46.5 billion and FY2026 revenue of $1.3 billion, the price-to-sales ratio is about 35.7x.

However, the forward P/E ratio is approximately 40.49x, reflecting market expectations of substantial profit growth in FY2027—management forecasts full-year Non-GAAP net profit margin around 50%.

Institutionally, sentiment remains overall optimistic. FactSet’s survey of 17 analysts shows the median target price has been raised from $260 to $270, with the highest estimate reaching $300. Needham raised its target from $220 to $275, maintaining a Buy rating. Stifel maintains a $250 target and Buy rating. Roth Capital sets a $300 target. The average target price among 20 analysts is $266.44.

Risks include the fact that CRDO trades at a forward P/E of about 76, leaving limited safety margins for AI capital expenditure digestion. Additionally, the company’s Beta is as high as 3.23, indicating significant volatility compared to the market average. Any marginal change in AI spending expectations could trigger sharp valuation adjustments.

Gate Stock Trading Goes Live: Directly Allocate AI Infrastructure Stocks Using USDT

For crypto ecosystem users interested in AI infrastructure investment opportunities, CRDO’s rise is certainly worth studying. Equally important is how to participate efficiently and at low cost. In June 2026, Gate completed intensive product iterations in real stock trading—officially launching real US stock trading on June 1, followed by the launch of Hong Kong stock trading services on June 11, and full web-based stock trading on June 12.

As of June 17, 2026, Gate’s stock trading services cover both US and Hong Kong markets, supporting over 11,500 stock-related assets. US stocks include over 10,000 tickers from NASDAQ, NYSE, and other major US exchanges; Hong Kong stocks initially include over 1,500 tickers from the Main Board and Growth Enterprise Market, focusing on liquid, high-quality companies.

Gate’s core advantages in stock trading are threefold:

First, buy and sell real stocks directly with USDT.
Traditional paths require crypto users to go through "sell crypto → withdraw fiat → cross-border remittance → open brokerage account and deposit." Gate simplifies this to: USDT in account → transfer to stock account → buy stocks with one click. No currency exchange, no cross-border remittance, no additional brokerage account needed.

Second, backed by real assets, with full shareholder rights.
Gate connects directly with licensed US broker-dealer Alpaca, which holds DTC clearance. Every share purchased is backed by independently custodied real assets. During holding, users automatically enjoy dividends, stock splits, rights issues, and other shareholder rights.

Third, low threshold and low cost.
The platform supports fractional trading starting from just 0.01 shares. Spot trading fees are as low as 0.023%. Users with a $2,000 position can upgrade to VIP status for preferential rates. US stocks support pre-market and after-hours trading, extending trading hours to 16×5. The Hong Kong market shares the same account system, with prices and P&L displayed in HKD, converted to USDT at real-time exchange rates.

Operationally, Gate’s stock trading process is extremely simple:
First, hold or acquire USDT in your Gate account.
Second, access the TradFi→Stocks section via the Gate App or Web.
Third, transfer USDT from spot to stock account.
Fourth, during trading hours, search for the target stock (e.g., CRDO), review order details, and confirm the trade.
The entire process requires no leaving the Gate platform—one account manages both crypto assets and stock holdings.

Conclusion

Credo Technology’s performance in 2026 reflects a deepening trend in AI investment logic—from "compute chips" to "full-stack infrastructure." As GPU compute clusters expand exponentially, connection layer bottlenecks become increasingly prominent—the fact that optical module lead times extend to 8-9 months is a direct quantitative indicator of this supply-demand imbalance.

CRDO’s over 70% increase this year, $1.3 billion in FY2026 revenue, and 206% YoY growth form a case of fundamental and market sentiment resonance. But high valuation and high volatility coexist—98x TTM P/E and a Beta of 3.23 remind investors that the returns and risks in this sector are both significant.

For investors seeking differentiated targets in the AI infrastructure space, Credo offers a case distinct from pure GPU narratives. Meanwhile, the launch of Gate’s stock trading features provides crypto ecosystem users with a low-cost, no-currency-exchange pathway to participate—using USDT within the same account system to directly allocate core assets across global capital markets.