Credo’s (CRDO) shares jumped about 12% on Monday afternoon after Jefferies made a bullish call on the American high-speed connectivity solutions provider.
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Jefferies’ analyst Blayne Curtis noted that there was a “significant disconnect” between how investors see Credo’s opportunity in artificial intelligence over the next several years and the actual benefits the company stands to gain. The analyst called CRDO a Buy and set a price target of $175, implying about 31% upside.
Curtis is a five-star analyst who ranks 47 out of the more than 12,000 analysts tracked on TipRanks. He boasts a 64% success rate and an average return of 31.40%.
Credo Offers ‘Meaningful Opportunity’ for Investors
For context, Credo designs and provides connectivity solutions such as integrated circuits, electrical cables, and SerDes chipsets.
The California-based company operates a fabless business model but plays a key role in helping to link data center infrastructure through its product lineup. The company is active across several markets, including the U.S., Mexico, Mainland China, and Hong Kong.
However, the company’s shares have dropped about 7% year-to-date. Yet, Curtis believes that Credo provides a “meaningful opportunity to invest in a premium growth name at a significantly discounted valuation.”
In terms of the company’s product offerings, the Jefferies analyst contended that active electrical cables have a “clear runway for continued growth.” He pointed to their usage in AI and general-purpose compute workloads to back up his argument.
Is Credo Stock a Good Buy?
Credo is one of the lesser-known data center stocks on Wall Street that offer massive upside, even as some members of the elite Magnificent Seven group continue to face sell-off pressure.
Across Wall Street, analysts have a Strong Buy consensus rating on Credo’s shares. This is based on 13 Buys and one Hold issued over the past three months.
In addition, the average CRDO price target of $190.23 implies about 43% upside from current trading levels.
