15 Best New Tech Stocks To Invest In

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

Market Capitalization as of January 21: $13.21 billion

Number of Hedge Fund Holders: 30

Credo Technology Group Holding Ltd. (NASDAQ:CRDO) provides high-speed connectivity solutions for data centers and networking applications. It develops and delivers innovative optical and electrical interconnect solutions (including SerDes, PHY chips, and active cables) to different hyperscalers, OEMs, and other key players in the industry. Its solutions enable fast and reliable data transfer.

Stifel analyst Tore Svanberg raised the price target on the company to $85 from $80 while maintaining a Buy rating. Stifel emphasized the importance of active copper technology over optical and passive cable solutions. The firm believes that Credo Technology Group Holding Ltd. (NASDAQ:CRDO) is positioned to capitalize on the growing AI-driven data center spending. It made a record revenue of $72 million in FQ2 2025 due to the demand for its AEC (Active Electrical Cable) products.

AI-driven data center architectures necessitate high-speed, reliable, and power-efficient connectivity solutions. Credo Technology Group Holding Ltd.’s (NASDAQ:CRDO) AECs excel in this environment by offering superior performance compared to traditional optical solutions. These AECs eliminate Link Flaps, which are momentary disruptions in network links that are costly in AI clusters due to significant downtime and loss of productivity. The company anticipates growth in AEC demand as AI deployments accelerate across the data center ecosystem.

TimesSquare Capital Management expressed its preference for companies like Credo Technology Group Holding Ltd. (NASDAQ:CRDO) that provide critical systems and benefit from growing IT budgets. The firm highlighted its Q2 performance and positive outlook which is driven by AI spending. Here’s what the Q2 2024 investor letter stated:

“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that closely tie to increasing shares of corporate IT budgets. Credo Technology Group Holding Ltd (NASDAQ:CRDO), a supplier of high-speed connectivity solutions, surged ahead by 51%. The company reported inline April quarter results and management’s July quarter guidance met expectations; AI spending is a growth driver.”