Credo Technology Group (CRDO): A Bull Case Theory

We came across a bullish thesis on Credo Technology Group on Nikhs’s Substack. As of 30ᵗʰ June, Credo Technology Group’s share was trading at $93.49. CRDO’s trailing and forward P/E were 319.28 and 120.25 respectively according to Yahoo Finance.

Credo Technology Group (CRDO) is transitioning from a connectivity ‘plumber’ to an intelligent platform provider, similar to Cisco’s transformation in the 1990s. The company’s ‘Pilot’ software platform provides predictive integrity, link optimization, and telemetry, making its hardware more intelligent and valuable. This shift is driven by the increasing demand for efficient and reliable AI infrastructure, as AI clusters require flawless, low-latency communication between thousands of GPUs.

The market currently values Credo as a high-growth semiconductor provider, but the company’s platform transformation has the potential to lead to a significant re-rating. The ‘Pilot’ platform creates operational lock-in, making it difficult for customers to replace Credo’s integrated solution. The company’s financial ambitions, including a sustainable ~40% non-GAAP net margin target, are aggressive for a hardware vendor but plausible with a platform approach. The potential for continuous value creation and deeper customer engagement is substantial, with a bull case scenario envisioning a 4-5x return by 2028.

The bull case scenario involves a market realization of Credo’s platform shift, leading to a re-rating as a critical AI infrastructure platform provider, with revenue reaching $3-4 billion and net margins expanding to 50%+. Whereas the bear case scenario involves the platform failing to gain traction, with revenue growth slowing and margins compressing. Investors who recognize the emerging software and intelligence layer may capture significant upside as this transformation unfolds.

Investors who recognize the deeper potential—seeing Credo as a company developing the “iOS for AI data fabrics”—and understand the emerging software and intelligence layer may be best positioned to benefit from the substantial upside as this transformation progresses.

Previously we covered a bullish thesis on Credo Technology Group by Deep Value Returns in May 2025, which highlighted the company’s strong recovery from earlier volatility and argued for a patient, long-term investment strategy despite high valuation multiples. The company’s stock price has appreciated approximately 47% since our coverage. This is because investors began pricing in its AI-driven growth narrative. Nikhs shares an identical view but emphasizes Credo’s transformation into an intelligent infrastructure platform through its Pilot software.

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Disclosure: None. This article was originally published at Insider Monkey.