Art of Speculation
Chinese-Language AI Fundamentals & Macro, Concentrated Investing
Credo is a solid company whose low-power interconnects between AI servers become more necessary as AI compute grows. If microLED technology actually lands and improves optical module efficiency and density, its moat could get stronger. Filling the chart gap, or even a pullback to the 200-day moving average, would be a good buying opportunity, though Astera Labs was preferred when the two were compared. x.com x.com
Credo's leading AEC position and vertical integration keep its optics thesis bullish despite SpaceX moving away from 1.6T AECs. That shift is a genuine risk, but xAI has been in Credo's AEC ecosystem the longest, which could support ZeroFlap optics and its telemetry software. Credo's VCSEL-based ALCs were still ramping toward 2027, giving it another route as customers move to transceivers. x.com x.com x.com
Credo's MicroVCSEL offers upside that does not appear priced in. Its copper and optics exposure, a SpaceX tailwind and fundamentals that look too good for its current valuation make it one of the tidiest AI infrastructure investments. x.com
Credo looks exposed as networking becomes AI's next bottleneck and Nvidia locks down optical fiber for scale-up, scale-out and scale-across links. MicroLED is readily available and a good contender for scale-up and potentially scale-out, with many Asian suppliers pivoting into it. x.com x.com
Credo's case rests on expanding its share of the AI connectivity stack, not on AEC keeping its extraordinary growth. AEC remains its largest business, with healthy growth and deep ties to five hyperscalers. Optical expands rather than merely replaces it: optical DSP, silicon photonics PICs and ZeroFlap optics should bring over $600M of revenue in FY2027, so a smaller AEC share is fine if the company grows. After its microLED ALC reveal, Credo looks clearly undervalued. x.com x.com x.com x.com … Show more
Credo's near-total share of AI data-center cables and unchanged estimates make its lower multiple look like a fear-driven opportunity. Its stock went from 27x to 20x forward earnings while the supply chain building those systems guided 2027 revenue to double. Buyers this week will probably be very happy a year from now. x.com
Credo is a trade rather than a long-term hold because co-packaged optics is the technology that closes the copper-to-optics gap its retimers and active electrical cables fill. If CPO ramps faster than expected in the 2027 architecture cycle, those products get designed out. That is not a 2026 problem, but it is why a decelerating hyper-growth chipmaker can't keep a 15x sales multiple forever. Customer concentration, which hit the stock before, adds risk, and Credo fits no AI endgame theme. x.com … Show more
Credo offers exposure to a massively growing AI buildout as a major connectivity supplier to hyperscalers and data centers. AI training and inference need thousands of GPUs to communicate through high-speed, lossless links, which Credo provides via electrical cables, optical solutions and retimers. Per Alpha Scope, it fell 18% despite beating estimates, with revenue up 157%, earnings up 231%, raised guidance, a 0.11 PEG, 21% ROIC and almost no debt. x.com
Networking, power and compute look more durable than cyclical memory in the AI buildout. Lumentum's revenue compounded year after year across the 2010s and 2020s, unlike Micron's; AWS revenue also compounded. Lumentum, Nebius, Bloom Energy and Credo should heavily outperform SanDisk and Micron from here, though AI itself remains heavily doubted. x.com x.com
Credo Technology's customer concentration is a hidden leverage risk investors underestimate. With four customers driving nearly all sales and two above 60%, Credo has little bargaining power if a hyperscaler demands lower prices, delays deployments, dual-sources or spends less, and any change could crush the stock. The AI boom hides this until growth normalizes. The business, economics and balance sheet are excellent and the valuation reasonable; much depends on how long the AI buildout lasts. … Show more
Credo was wrongly dismissed as a copper-era connectivity play, and analysts are finally recognizing its optical roadmap. Per @wallstengine, Evercore ISI initiated at Outperform with a $325 target, saying Credo will increasingly be seen as a broad copper and optical AI-connectivity play through optical DSPs, silicon photonics ICs, microLED cables and especially ZFOptics modules, taking the same systems approach as with AECs. The market had decimated it in late 2025 as a horse-and-buggy name. … Show more
