Forget Palantir, another AI stock is up 180% in 2025

Unlike Palantir, which generates gross by helping enterprises and governments securely make AI applications, Credo's occurrence stems from being the market-share starring supplier of high-speed progressive electrical cables, oregon AECs, utilized to link web infrastructure wrong information centers.

Demand is soaring due to the fact that AECs service arsenic quiet, unsung AI workhorses, accelerating connection betwixt high-end servers packed with power-hungry, ultra-fast AI chips, specified arsenic Nvidia's GPUs and TPUs made by Alphabet and Amazon.

As much information centers are built and hyperscalers question to marque their instrumentality much effectual for AI grooming and inference, they're progressively buying much AECs from Credo Technology, sending revenue, profit, and its banal terms higher.

On Dec. 1, Credo Technology (CRDO) reported its latest quarterly income and nett growth. The results were impressive, surpassing those of Palantir (and astir each different large AI stock), and catapulting shares 10% higher, bringing its year-to-date banal instrumentality to an eye-popping 180%.

The company's gross skyrocketed 272% twelvemonth implicit twelvemonth to $268 million, resulting successful net per share, oregon EPS, of 67 cents, 35% higher than Wall Street analysts were expecting.

For perspective, Palantir's gross grew 63% year-over-year, and its shares are up 126% successful 2025.

Credo Technology's CEO, Bill Brennan, said successful its net call:

Credo Technology's maturation was attributed to accelerating request from hyperscalers for AECs. While the institution doesn't disclose precisely which hyperscalers it supplies, it lists 4 arsenic large customers, each representing implicit 10% of its quarterly revenue. Altogether, those hyperscalers correspond implicit 90% of Credo Technology's sales.

• Power Efficiency (Crucial for AI Clusters): AI information centers necessitate a monolithic magnitude of electricity, and AECs devour up to 50% little powerfulness than progressive optical cables portion inactive matching the required speed.

• Distance and Performance: Copper cables are inexpensive and devour comparatively small power, but lone reliably transmit high-speed information implicit precise abbreviated distances. AECs incorporated tiny semiconductors that cleanable signals, allowing them to beryllium thinner, much flexible options for connecting servers and switches implicit longer distances indispensable for connecting cogwheel wrong a azygous rack oregon neighboring AI racks successful clusters.

• Reliability and Density: Traditional copper wires are excessively heavy for modern server racks, and signals degrade erstwhile they're bent. Meanwhile, optical cables usage lasers that tin acquisition momentary transportation disruptions, known arsenic nexus flaps, which tin origin downtime. Since AECs are thinner, lighter, and flexible, they're easier to enactment with and little apt to fail.