Goldman Sachs’ Best Phase 2 AI Stocks: Top 24 High Conviction AI Stocks

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

Year To Date Share Price Gain: 108%

Number of Hedge Fund Investors in Q2 2024: 36

Credo Technology Group Holding Ltd (NASDAQ:CRDO) is a data center networking products provider. The firm sells products such as cables, signal processors, and cards. With a market cap of $6.35 billion, Credo Technology Group Holding Ltd (NASDAQ:CRDO) is a smaller company on our list which increases the chances for it to grow its valuation. It also means that the biggest hypothesis driver for the firm is its ability to land mega deals which inject significant revenue into the income statement. On this front, Credo Technology Group Holding Ltd (NASDAQ:CRDO) shared earlier this year that it expects to land a new 10% customer in the current quarter, to enable not only revenue growth but also customer diversification from the two entities that currently also account for 10% or more of the firm’s revenue each. To help with retaining customers, Credo Technology Group Holding Ltd (NASDAQ:CRDO) is also focusing on key failure points of electric cables called link flaps which can lead to server down times and lost money. These could help enable it to establish a stable footing in the market and grow its revenues.

TimesSquare Capital Management mentioned Credo Technology Group Holding Ltd (NASDAQ:CRDO) in its Q2 2024 investor letter. Here is what the fund said:

“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.”