BofA Sees Credo Technology Group Holding Ltd (CRDO) As Long-Term Beneficiary of AI-Driven Cloud Connectivity

Credo Technology Group Holding Ltd (NASDAQ:CRDO) is included in our list of the best AI data center stocks to buy now.

BofA Sees Credo Technology Group Holding Ltd (CRDO) As Long-Term Beneficiary of AI-Driven Cloud Connectivity

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On January 26, 2026, BofA described the semiconductor industry as increasingly bifurcated, noting that although some areas of the market appear stretched, some compute names still offer asymmetric upside. As hyperscale clients place a high value on performance-per-watt and connectivity efficiency, Credo Technology Group Holding Ltd (NASDAQ:CRDO) was identified as one of four businesses best suited for long-term AI-driven infrastructure buildouts. Furthermore, BofA stressed that compute-focused vendors are still heavily dependent on structural cloud investment. According to its tracker, cloud capex will grow by 38% year-over-year in 2026 and could reach 50%+ by the year’s end. The company reported that free cash flow throughout the ecosystem is still positive despite increased spending. The cash flow strength bolsters investor confidence in the ongoing implementation of cutting-edge networking and interconnect solutions as AI workloads grow.

On January 21, 2026, Rosenblatt initiated coverage of Credo Technology Group Holding Ltd (NASDAQ:CRDO) with a Neutral rating and a $170 price target, amid a favorable industry backdrop. Thanks to the company’s early leadership in 400G and 800G connectivity and traction in short-reach AI data center architectures, Rosenblatt predicts that the company’s revenue will almost triple and its earnings will more than quadruple in fiscal 2026. However, the firm warns of competitive pressure that is likely to increase.

Credo Technology Group Holding Ltd (NASDAQ:CRDO) delivers connectivity solutions and products for the data infrastructure market, supplying integrated circuits, SerDes chiplets, and active electrical cables that enable efficient data transmission in cloud and networking environments.

While we acknowledge the potential of CRDO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CRDO and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.