AI build-out Strengthens Credo Technology Group Holding Ltd (CRDO)

AI build-out Strengthens Credo Technology Group Holding Ltd (CRDO)

Mon, September 21, 2026 at 4:58 PM GMT+3 3 min read

• CRDO +6.02%
• ^RUT +0.61%

Carillon Tower Advisers, an investment management company, released its second-quarter 2026 investor letter for the "Carillon Eagle Small Cap Growth Fund". The letter can be downloaded here. Small-cap stocks rallied broadly in the second quarter, with the Russell 2000 Growth Index (+25.71%) outpacing Value +17.24%). Information Technology (+46.79%) led all sectors, supported by solid gains in Real Estate (+25.91%), Industrials (+25.80%), and Health Care (+25.54%). Consumer and defensive sectors lagged, while Energy (-2.40%) was the sole sector in the red. Following a strong quarter, the outlook for equity markets remains positive, supported by robust corporate profits and economic growth. However, midterm election uncertainties could introduce volatility, especially around data center development, a key economic driver. The $1 trillion data center spending boosts corporate earnings and supports ongoing AI infrastructure investments. Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026.

In its second-quarter 2026 investor letter, Carillon Eagle Small Cap Growth Fund highlighted Credo Technology Group Holding Ltd (NASDAQ:CRDO). Credo Technology Group Holding Ltd (NASDAQ:CRDO), a US-based semiconductor company that provides high-speed connectivity solutions for optical and electrical Ethernet and PCIe applications, contributed 1.26% to the fund's returns this quarter. On September 18, 2026, Credo Technology Group Holding Ltd (NASDAQ:CRDO) closed at $175.89 per share. Over the past month, Credo Technology Group Holding Ltd (NASDAQ:CRDO) declined 20.99%, but its shares are up 7.18% over the past year. Credo Technology Group Holding Ltd (NASDAQ:CRDO) has a market capitalization of $33.05 billion, and its stock has traded within a 52-week range of $86.49 to $308.67.

Carillon Eagle Small Cap Growth Fund stated the following regarding Credo Technology Group Holding Ltd (NASDAQ:CRDO) in its Q2 2026 investor letter:

"Credo Technology Group Holding Ltd (NASDAQ:CRDO) provides a key high-speed cable needed to connect servers and racks in data centers. The company reported strong results, and investors appreciated the near-term strength given the AI build-out by hyperscaler companies and delays of potential competing replacement technology."

Credo Technology Group Holding Ltd (NASDAQ:CRDO) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 86 hedge fund portfolios held Credo Technology Group Holding Ltd (NASDAQ:CRDO) at the end of the second quarter, which was 59 in the previous quarter. While we acknowledge the potential of Credo Technology Group Holding Ltd (NASDAQ:CRDO) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In a previous article, we covered Credo Technology Group Holding Ltd (NASDAQ:CRDO) and, noted that its impressive 115% year-over-year revenue growth in Q1 2027 was tempered by a decline in GAAP gross margin to 64.5%, prompting investors to question if AI connectivity infrastructure can scale sustainably. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

This article is originally published at Insider Monkey.