Billionaire David E. Shaw’s 10 Small-Cap Stock Picks with Huge Upside Potential

8. Credo Technology Group Holding Ltd. (NASDAQ:CRDO)

D. E. Shaw’s Equity Stake: $266.89 Million

Market Capitalization as of May 9: $8.78 Billion

Stock Upside Potential as of May 9: 36.55%

Number of Hedge Fund Holders: 43

Credo Technology Group Holding Ltd. (NASDAQ:CRDO) is a technology company that provides high-speed connectivity solutions for optical and electrical Ethernet applications. Its products include HiWire active electrical cables, optical digital signal processors, and SerDes IP. The company is increasingly capitalizing on the growing demand for its solutions in the data infrastructure market, affirming why it is one of billionaire David E. Shaw’s 10 small-cap stock picks with tremendous upside potential.

Companies around the world are making significant investments in data centers to facilitate cloud computing and artificial intelligence. Consequently, global data center capital expenditures increased by almost 50% to about $455 billion in 2024 alone. As a result, Credo Technology Group Holding Ltd.’s (NASDAQ:CRDO) products, especially its Active Electrical Cables (AECs), are in high demand due to the continuous expansion of AI infrastructure.

As businesses assemble enormous clusters of AI servers, they need a ton of bandwidth to transfer data effectively. The AECs from Credo Technology Group Holding Ltd. (NASDAQ:CRDO) are made explicitly for that use. Credo Technology delivered robust third-quarter FY2025 financial results, surpassing market expectations. Revenue rose 154% year over year to $135 million as earnings per share came in at $0.25 against $0.18 expected.