Rosenblatt initiated coverage of Credo with a Neutral rating and a $170 price target, arguing the stock's near-term growth is already priced in. The broker expects revenue to nearly triple and earnings to more than quadruple in fiscal 2026, driven by demand for its high-speed copper cables in AI data centers.

Credo's leadership in 400G and 800G active electrical cables, which connect servers over short distances, has benefited most large cloud companies. A key growth driver is multi-rack AI systems, where Credo's cables can link adjacent racks up to seven meters apart. This expands beyond single-rack connections.

However, Rosenblatt sees limits. The total market for these cables was just over $1 billion in 2025, with Credo holding most share. This concentration invites competition from lower-power alternatives in 2026. The broker also doubts copper's viability at future higher speeds and longer distances, where optical connections will dominate.

Credo has announced plans to enter optical products, but Rosenblatt sees no clear edge in that competitive space. The stock has risen about 90% over the past year, and the $170 target implies cautious growth expectations beyond 2026. The core question is whether Credo's current advantage can withstand technological shifts and new entrants.