Is Credo Technology a Better AI Networking Buy Than Broadcom?

Everybody knows Broadcom (NASDAQ:AVGO).

It's a chip giant in the trillion-dollar club, sporting a $1.65 trillion market cap as of Nov. 13. Trailing sales are $89.1 billion, $38.3 billion trickled down to the bottom line, and free cash flow of $39.4 billion is comparable to the gross domestic product of Iceland or Bolivia. Your smartphone probably has a few Broadcom chips, and the average corporate data center has thousands.

Credo Technology Group (NASDAQ:CRDO) is a different story.

This is a networking expert, best known for its active electric cables (AECs) and serializer/deserializer (or "SerDes") data converter modules. Credo's technology proved useful to large-scale data centers, where low power consumption matters as much as top-speed performance. As a result, trailing sales rose 869% over the last three years, and Wall Street is downright excited about the stock. However, Credo is a minnow next to Broadcom's bulk. After the massive sales jump, trailing revenues are still just $1.6 billion. And you'd have to be a network engineer or data center architect to come across its products in the wild.

But both companies are AI networking investments. Does Broadcom's gigantic scale make it a winner, or should you focus on Credo's high-octane growth instead?

Broadcom: The undisputed heavyweight

Broadcom provides the picks and shovels for the AI gold rush at an industrial scale. In Q3 2026, the company reported AI semiconductor revenue of $16.7 billion, a staggering 221% year-over-year increase. More importantly, management's forward-looking visibility is almost unheard of in the semiconductor space.

CEO Hock Tan raised fiscal 2026 AI revenue guidance to $58 billion, projecting $115 billion in 2027 and $230 billion by 2028. This growth is heavily supported by custom AI accelerators (XPUs) co-developed with frontier labs such as Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), and Anthropic. Broadcom's Tomahawk Ethernet switches are also popular in AI data centers, meaning the company wins whether a data center needs processing power or data transfer tools. Trading at a forward P/E ratio of roughly 18, it gives investors a relatively safe, dividend-paying anchor for their AI portfolios.

Credo: The triple-digit growth engine

Credo recently reported fiscal 2027 first-quarter revenue of $479 million. While that is a fraction of Broadcom's top-line haul, it more than doubled year over year. As noted earlier, that was Credo's seventh consecutive quarter of triple-digit revenue growth.

Beyond the ultra-efficient AECs, Credo's chief catalyst right now is a rapid expansion into the optical market. Driven by its optical digital signal processors (DSPs), silicon photonics, and innovative Zero-Flap Optics, Credo expects its optical segment alone to generate over $600 million in sales this fiscal year. As AI data clusters grow larger and more complex, Credo's focus on system-level reliability and power efficiency makes it a vital partner for hyperscalers with hyper-large electric bills.

Fun fact: Broadcom makes SerDes modules, too. Credo most likely collects royalties from those sales.

Image source: The Motlsey Fool.

The verdict: Scale vs. speed

Choosing between these two networking plays ultimately comes down to your personal investing style and risk tolerance.

Broadcom is the clear choice for conservative investors. It is a foundational tech stock with a highly visible runway, not to mention decades of relationship-building across the tech sector.

But if you are looking for explosive, market-beating upside, Credo Technology makes a compelling case. Its specialized technological moat in both copper and optical connectivity is opening up massive new addressable markets. While it carries the typical volatility of a high-growth tech stock, Credo's sheer momentum makes it a top pick for growth-focused portfolios.

Anders Bylund has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Broadcom, and Meta Platforms. The Motley Fool has a disclosure policy.