I’ve written about Credo and Alab several times in the past. Credo was one of my biggest winners last year. And now both look they could make a return.

Credo and Astera Labs both solve the same big problem: moving huge amounts of data in AI data centers. So, they basically sell high-speed connectivity hardware for AI data centers, but they sit in different parts of the network stack.

Credo is more focused on moving data between machines. In a data center, you have thousands of servers spread across racks and buildings. All of them need to communicate constantly. Credo builds the technology that sends data across these longer distances, often through cables and network infrastructure. Their goal is to make that data travel fast, with low power, and without losing signal quality.

Astera Labs focuses more on what happens inside the system. Within a single server or cluster, you have GPUs, CPUs, and memory that all need to exchange data at extremely high speeds. Astera builds chips and software that manage these internal connections. They make sure data flows smoothly between components so the system can run at full performance without bottlenecks.

But even more importantly they are two of the fastest growing AI networking companies.

If you look at the charts below, you’ll notice that even the fastest growing stocks can drop hard, and they do it more often than you think. That’s why managing risk is so important. You need to cut losses when you’re wrong. Because timing is essential. It is the difference between making a killing or getting killed. Even the very best companies go through large drawdowns and you don’t know how long they are going to last. And sometimes they never recover.

But you’ll also notice that a lot of these moves look almost straight when you look back. Of course, that’s easy to say in hindsight. In real time, it’s much more messy and volatile.

The best time to buy usually come after a turn is confirmed, and the same goes the other way around. But the bigger lesson is this: you never really know how far a move can go, in either direction. That’s why you don’t want to fight the trend. Strength can stay strong much longer than you expect, and weakness can drag on way more than feels reasonable.

So instead of trying to call tops and bottoms, focus on what the market is actually doing. And right now it looks like both are trying turnaround after their correction. Hence, I’m keeping them very close on my watchlist.

Credo ($CRDO)

AsteraLabs ($ALAB)