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Credo Technology Group Holding Ltd (NASDAQ:CRDO) is one of the 9 Stocks Stealing the Show.

Credo Technology rallied for a 4th consecutive day on Wednesday, up 5.9 percent to close at $168.35 apiece, as investors took heart from Mizuho’s price target upgrade and bullish rating for its stock.

In a market note, the investment firm raised its price target for Credo Technology Group Holding Ltd (NASDAQ:CRDO) to $220 from $200 previously, while maintaining an “outperform” rating, following its acquisition of DustPhonics, which is expected to bolster revenues by 75 percent or around $200 million in fiscal year 2027.

For illustration purposes only. Photo by Tima Miroshnichenko on Pexels

DustPhonics is engaged in the development of Silicon Photonics Photonic Integrated Circuit (SiPho PIC) technology for optical transceivers. It boasts a portfolio of on-demand SiPho PIC products, including 400G, 800, and 1.6T.

Credo Technology Group Holding Ltd (NASDAQ:CRDO) said that DustPhonics’ addition is expected to boost its optical revenues to more than $500 million for the fiscal year 2027, position it as a key player in a vertically integrated connectivity stack for scale-out and scale-up networks, and address both electrical and optical interconnects across the full AI infrastructure buildout.

The sector alone opens doors for a $6 billion market potential.

“This combination positions us at an inflection point in optical. As adoption accelerates across hyperscale AI infrastructure, we expect our optical business to scale into a meaningful and rapidly growing contributor by fiscal 2027,” Chairman, President, and CEO William Brennan said.

Apart from Mizuho, Credo Technology Group Holding Ltd (NASDAQ:CRDO) also earned a “buy” recommendation from Jefferies, with a price target of $175.

Jefferies said the coverage was based on the belief that its current stock price has yet to fully reflect growth prospects from the AI industry, with the listed firm’s active electrical cables expected to continue benefiting from data center buildouts.

While we acknowledge the potential of CRDO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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