Credo Technology Shares Rise 11% Following Jefferies Buy Rating
Credo Technology saw an 11% increase in stock value after Jefferies initiated coverage with a buy recommendation, highlighting a disconnect between investor concerns and the company's long-term growth potential in AI infrastructure. The total addressable market for Active Electrical Cables (AECs) is projected to reach 12.3 million units by 2027, with Credo expected to maintain a 70% market share, resulting in approximately $3 billion in revenue.
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Credo Technology's stock surged 11% after Jefferies issued a buy recommendation, suggesting the market may be underestimating the company's growth potential in AI infrastructure. Jefferies forecasts the total addressable market for AEC units to grow from 8.6 million in 2023 to 12.3 million in 2027, with an optimistic scenario predicting 9.5 million and 14.6 million respectively.
Analyst Blayne Curtis emphasized that the demand for both AI and general computing workloads provides ample growth opportunities. Additionally, Credo is expanding its optical connectivity offerings, including Active LED cables and ZeroFlap transceivers, which could generate over $300 million in annual revenue. This diversification strategy positions Credo favorably amidst ongoing debates about copper versus optical technologies.
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