Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent a good deal of time on Credo, and we want to be fair to it. This is a founder-led company that saw the copper connectivity wave inside artificial intelligence clusters before its much larger competitors did, executed nearly flawlessly for two years, and now earns a 68% gross margin and a 49% non-GAAP net margin with no debt. Management is capable, candid, and owns a meaningful stake. Revenue has tripled in a year and the company has posted seven straight quarters of triple-digit growth. We are nonetheless rating it a 2, and we want to explain why in plain terms, because the rating is not a comment on the people running it. The moat is real today but young and unproven across a full technology cycle. Active electrical cables did not exist as a volume category five years ago.
Recent filings analysed: 10-Q (2026-03-03), 10-Q (2025-12-02), 10-Q (2025-09-04), 10-K (2025-07-02).
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