To The Moon

$Credo Technology Group Holding Ltd(CRDO)$ dropped over 10% on Thursday, and almost another 10% on Friday—erasing nearly 20% of its value in just 48 hours. 📉 What caused the panic? It all started with $MaxLinear(MXL)$ MaxLinear reported earnings on Thursday after market close. The numbers were actually solid (revenue up 70%+ YoY, beating estimates). #But it was one specific comment on the earnings call that hit Credo right in the gut. 🥊 🎙️ 1. The Threat: MaxLinear Calls Out Credo’s Monopoly MaxLinear CEO Kishore Seendripu pointed out that Credo currently owns over 90% of the Active Electrical Cable (AEC) market. However, as the industry transitions to next-gen 1.6T technology, complexity spikes—and market share will naturally diversify. MaxLinear’s goal? Grab 20% to 30% of that 1.6T market within the next 2 to 3 years. For a company like Credo, whose high valuation relies on near-total market dominance, that single statement was a wake-up call. ⚡ 🔍 2. Let’s Look at the Fine Print Before jumping to conclusions, let's break down the reality: MaxLinear doesn’t make entire cables—it only sells chips to cable makers. They plan to target 1 or 2 major US hyperscalers first. Revenue won’t even start until 2027, with meaningful volume delayed until 2028. 💡 In short: This is a threat 2 to 3 years down the road, not next quarter. 📉 3. Why Did the Market Freak Out So Much? Because timing is everything. A research report from Edgewater dropped on the exact same day, adding fuel to the fire 🔥: Delayed 1.6T Rollout: Mass deployment of 1.6T cables in major AI projects isn't happening anytime soon. Cisco & Astera Risks: Cisco’s internal 1.6T project might source chips from Broadcom or MaxLinear instead of Credo. Plus, Astera Labs ($ALAB) could soon challenge Credo for Amazon’s business. Insider Sales: Credo’s CEO and CTO sold shares this week. Even though these were pre-scheduled 10b5-1 plans, the bad timing spooked investors even further. 🧠 4. My Take: Is This an Overreaction? This sell-off isn't just about a new competitor entering the ring. The market is terrified of two core risks: 🔴 Risk #1: Will Credo lost its dominant monopoly starting in the 1.6T era? (2–3 years away, many variables ahead) 🔴 Risk #2 (The Bigger Issue): Will the hyped 1.6T upgrade cycle arrive much later than expected? Credo’s premium valuation was priced on rapid 1.6T adoption. If that timeline slides, the stock has to digest that delay—even if they don't lose market share. 💡 The Bottom Line Despite the noise: No major Wall Street analyst has downgraded $CRDO over this news; consensus remains bullish. Monopolies with 90%+ share don't lose customers overnight—qualification and testing take years. My verdict? The market reacted emotionally and overreacted in the short term. Expect volatility while the market digests the timeline, but the core thesis isn't broken yet. 📊