The AI infrastructure trade continues to evolve, but one thing has become increasingly clear — hyperscalers are not slowing down. After months of concerns that the enormous amounts of capital flowing into AI infrastructure could eventually overwhelm returns, recent results from the largest cloud companies have provided important evidence to the contrary. AI demand remains extremely strong, capacity remains constrained in parts of the market, and companies are increasingly showing that the billions being invested in infrastructure are translating into actual revenue.

Microsoft $MSFT ( ▼ 2.26% ) recently reported that its AI business surpassed a $37 billion annual revenue run rate, growing 123% year over year, while Azure revenue increased 40%. The company has also continued expanding physical AI capacity, including a new Texas data center campus expected to add roughly 2 GW of capacity.⁠

That matters enormously for the companies supplying the infrastructure underneath those AI clusters, and one of the most interesting beneficiaries remains Credo Technology $CRDO ( ▲ 8.26% ).

Credo provides the high-speed connectivity technology that allows GPUs, servers, switches and other components inside modern data centers to communicate with each other. As AI clusters become larger, the amount of data moving between those components explodes, making networking increasingly important to overall system performance. And Credo has positioned itself directly in that bottleneck.

Following another exceptional year of growth, continued hyperscaler spending and an expanding product portfolio across both copper and optical connectivity, the long-term thesis remains bullish. Let’s take a deeper dive.