Not Nvidia. Not Micron. This Little-Known Chip Stock Is the AI Boom's Best-Kept Secret.
Key PointsCredo makes the active electrical cables and connectivity chips that link thousands of AI accelerators.
Most investors know that GPUs and memory are crucial for artificial intelligence (AI) data centers, but few consider the importance of connectivity. Credo Technology Group (CRDO -7.60%) is the lesser-known chip designer that specializes in this area, with its stock more than tripling in three years. The company's signature product is the active electrical cable (AEC), which uses chips to clean up signals, allowing hyperscalers to connect servers and switches at 800 gigabits per second over copper.
Credo also sells stand-alone parts and licenses intellectual property. The company's stock has been relatively unnoticed due to what it sells rather than how much it sells. Recently, Credo acquired DustPhotonics, an Israeli silicon photonics company, which will bring photonic chip capability to its existing DSPs and cable systems.
The company plans to shift from copper to light-based connectivity, with the first products expected to ship in 2027. Credo's CEO, Bill Brennan, sees wider, slower, and better optics that can outperform copper, with a roadmap and standards push to support this transition. Investors should be cautious due to the company's concentrated revenue among a few hyperscalers, but the move into silicon photonics presents a compelling investment story.
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