Credo Technology Group’s AI Chip Surge and Polen Fund’s Performance Turnaround

Polen Capital’s Q2 2026 investor letter details how Credo Technology Group Holding Ltd (NASDAQ:CRDO)’s dramatic stock rally, driven by an AI‑focused infrastructure boom, impacted fund performance.

The New Engine of AI Infrastructure: Credo’s Ascent

Credo supplies high‑speed optical, Ethernet, and PCIe solutions that sit at the heart of data centers and AI supercomputers. On July 15 2026 the share closed at $226.74; despite a ‑22.39% one‑month dip, it posted a 114.28% gain over the past 52 weeks. The company’s market cap stands at $42.28 billion.

Polen 5Perspectives Portfolio Dynamics

Polen’s small‑growth strategy delivered a 33.22% gross and 32.83% net return in Q2 2026, outpacing the Russell 2000 Growth’s 25.71% performance. This success was buoyed by positive AI‑spending signals and accelerating data‑center investments.

■A 200% short‑term stock surge eroded the fund’s relative performance.

■59 hedge funds held CRDO at the end of Q1, dropping to 69 in Q2.

■The fund’s largest relative detractor stemmed from having no exposure to Credo during the quarter.

Hedge Funds’ Perspective and Investment Playbooks

While Polen acknowledges Credo’s upside, it favors other AI equities that promise greater upside with lower downside risk. The note highlights “severely undervalued” AI stocks that could benefit from Trump‑era tariffs and the on‑shoring trend.

■AI infrastructure spending: Announcements from hyperscalers refreshed sector confidence.

■Small‑growth stocks: Delivered robust performance despite macro‑economic and trade‑policy concerns.

■Diversification: Fund managers prioritize risk management by avoiding over‑concentration in a single AI name.

Ege Kaan – Wall Street and US Macro Strategy Lead: “Credo’s integration into AI infrastructure is propelling the stock in the short run, but fund managers’ limited exposure is crucial for long‑term performance stability. Investors should balance growth potential against volatility when evaluating AI‑driven chip firms.”