Credo Technology Group Holding Ltd (NASDAQ:CRDO) was started at Overweight with an $18 per share price target at Barclays on Friday.
Analysts stated that CRDO is the first company with a commercially available AEC product, and they "even helped define the HiWire Alliance."
"The hyperscale server market is expected to grow at a >6% CAGR through 2026, according to 650 Group. Within that, we see AEC adoption moving from ~10% today to ~55% in CY26," the analysts explained.
"Competitors such as MRVL and Astera Labs are alternatives in the market but differ in that they are component suppliers, which offers different economics but also a different level of support vs. an integrated solution. We assume a >45% share for CRDO in CY26," they added.
The analysts also noted that the "IP story should get more credit" while the company's AI exposure is a plus.
"While investors scramble for ways to gain exposure to AI outside of NVDA, CRDO should be a strong beneficiary," said the analysts, who explained the move to AI brings two major themes that should be meaningful tailwinds. These include the faster adoption of higher speeds in existing AI deployments and the fact it pushes faster adoption of speed upgrade out the back of servers.