Shares of Credo Technology Group Holding Ltd (CRDO) surged 5.26% in pre-market trading on Friday, driven by a bullish report highlighting the company's innovative hardware solutions for optimizing AI systems and data centers.

Credo offers cutting-edge products that improve energy efficiency and reduce operational costs for large data centers and AI applications, including high-speed Active Electrical Cables, optical devices for efficient data transmission, and networking solutions like Pluggable Patch Panels and PCI Express Retimers.

The company is experiencing robust revenue growth, with a projected 67% increase in the upcoming quarter. Despite a current net income loss, Credo boasts a strong 63.2% gross margin and $383 million in cash reserves. Analysts view Credo as potentially undervalued, trading at favorable valuation metrics compared to competitors, and well-positioned to capitalize on surging demand for next-generation connectivity solutions aligning with the growth of AI.