Credo Technology Skyrockets 5.1%: Can AI Infrastructure Demand Sustain the Surge?

Summary
• Credo Technology (CRDO) surges 5.095% to $97.665, hitting an intraday high of $98.06
• Insider ownership and AI data center demand dominate headlines
• Options volatility spikes to 70–77% with 1.3% turnover surge
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Credo Technology’s explosive 5.1% rally has ignited speculation about its role in the AI infrastructure boom. With the stock trading near its 52-week high of $104.35 and a dynamic P/E of 321x, the market is betting on Credo’s ability to capitalize on AI-driven data center expansion. The surge, driven by a mix of fundamental optimism and speculative options flows, underscores the stock’s volatile but directional nature as it navigates critical technical levels.

AI Infrastructure Demand and Insider Confidence Ignite CRDO
Credo’s surge stems from its critical role in AI-driven data center connectivity, as highlighted in Zacks’ ‘Bull of the Day’ designation and Simply Wall St. coverage. The company’s PCIe Retimers are gaining traction in AI clusters, with 85% revenue growth expected in FY26. Insider ownership, emphasized in multiple Simply Wall St. reports, adds credibility to its growth narrative. Meanwhile, the Global Semiconductor Alliance board appointment of CEO Bill Brennan underscores institutional validation. Technically, CRDO’s price action—breaking above the 93.47 resistance level and trading near the Bollinger Upper Band—reflects a long-term bullish trend (30D MA at 89.07) clashing with short-term bearish momentum (Kline pattern), creating a volatile but directional setup.

Communication Equipment Sector Mixed as CRDO Leads AI Charge
While the Communication Equipment sector sees mixed momentum—with Cisco (CSCO) up 0.83%—CRDO’s 4.54% rally outpaces peers. The sector’s focus on AI infrastructure and 5G expansion (noted in RCR Wireless News) aligns with Credo’s core strengths. However, CRDO’s high P/E (320x) and speculative options activity suggest it trades more as a growth story than a traditional sector play. This divergence highlights CRDO’s dual identity: a tech enabler for AI and a speculative asset for volatility-seeking traders.

High-Leverage Calls and Gamma-Driven Volatility: Strategic Plays for Aggressive Bulls
• 200-day MA: 59.64 (far below current price)
• RSI: 58.46 (neutral, not overbought)
• MACD: 5.19 (bullish divergence from signal line 6.59)
• Bollinger Bands: 94.92 (middle), 102.52 (upper) – CRDO near overbought territory
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CRDO’s technicals suggest a volatile but directional trade. Key levels to watch: the 93.47 short-term MA resistance and 86.54 long-term MA support. The stock’s 4.78% intraday move aligns with the 5.96% projected range for Wednesday. Despite a short-term bearish Kline pattern, the long-term MA crossover and AI-driven fundamentals favor a bullish bias.

Top Options Picks:
• CRDO20250815C90 (Call, $90 strike, Aug 15 expiry):
- IV: 76.68% (high volatility)
- Delta: 0.6865 (moderate directional sensitivity)
- Theta: -0.2405 (rapid time decay)
- Gamma: 0.0186 (moderate price sensitivity)
- Turnover: 198,737 (liquid)
- Leverage ratio: 8.50% (high)
This call thrives in a 5% upside scenario. With CRDO at $97.38, a 5% move to $102.25 would yield max payoff of $12.25 per contract. Ideal for traders expecting a breakout above the 102.52 Bollinger Upper Band.
• CRDO20250815C95 (Call, $95 strike, Aug 15 expiry):
- IV: 76.58% (high volatility)
- Delta: 0.5835 (balanced sensitivity)
- Theta: -0.2414 (rapid decay)
- Gamma: 0.0205 (high price sensitivity)
- Turnover: 301,661 (liquid)
- Leverage ratio: 11.26% (very high)
This contract offers explosive potential with a 5% upside. At $102.25, payoff is $7.25 per contract. High gamma and leverage make it ideal for aggressive bulls.
If CRDO breaks $102.52 (Bollinger Upper Band), CRDO20250815C90 becomes a core play. Aggressive bulls may consider CRDO20250815C95 into a bounce above $97.58 (short-term MA resistance).

Backtest Credo Technology Stock Performance
The 5% intraday surge in CRDO has historically led to positive short-to-medium-term gains. The backtest data shows that after a 5% increase in CRDO, the 3-day win rate is 58.15%, the 10-day win rate is 58.59%, and the 30-day win rate is 61.45%. This indicates that CRDO tends to experience gains in the immediate aftermath of such events.

CRDO’s AI Surge: A High-Volatility Play with Clear Pathways
Credo’s 4.54% rally is a blend of AI infrastructure demand and speculative options flows, but sustainability hinges on breaking above $102.52 (Bollinger Upper Band) or $104.35 (52-week high). Key signals to monitor: the 93.47 short-term MA resistance and 86.54 long-term MA support. While the sector leader Cisco (CSCO) trades flat, CRDO’s momentum suggests it’s being viewed as a pure-play AI enabler rather than a sector staple. Investors should prioritize CRDO20250815C90 for a directional bet or CRDO20250815P95 for downside protection. The next 48 hours will test whether this surge is a flash in the pan or the start of a sustained AI-driven rally.