Artificial intelligence is no longer just a buzzword echoing through Silicon Valley boardrooms—it's a force fundamentally reshaping the global economy, with ripples felt from Wall Street to the world’s largest industrial plants. Nowhere is this transformation more visible than in the explosive growth of data centers and the surging demand for the infrastructure and energy required to power them. As hyperscalers like Microsoft, Amazon, and xAI race to build out AI-driven capabilities, a new class of winners is emerging: companies that supply the backbone and the electricity for this digital revolution.
On August 20, 2025, Mizuho Securities sent a clear signal to investors by raising its price target for Credo Technology (NASDAQ: CRDO) to $135 per share—a hefty 20.54% jump from its previous outlook. According to AInvest, this move underscores a growing conviction that Credo is not just riding the AI wave, but is actually helping to build the surfboard. The firm’s proprietary innovations, particularly in power-efficient Active Electrical Cables (AECs) and optical Digital Signal Processors (DSPs), have become critical in addressing the massive data transfer and energy efficiency challenges faced by hyperscale data centers.
Credo’s recent financials back up the optimism. In the second quarter of 2025, the company reported $170 million in revenue, marking a staggering 179.6% year-over-year increase, and posted earnings per share of $0.35—comfortably beating analyst expectations. As noted by AInvest, Mizuho expects Credo to diversify its revenue base further by adding two new hyperscale customers by fiscal 2026, which could accelerate its already impressive growth trajectory.
But what sets Credo apart from the pack? The answer lies in its technological edge. Its HiWire AECs, for example, combine retimer, gearbox, and forward error correction into a compact copper format, delivering high-speed connectivity with up to 50% less power consumption than traditional optical solutions. This is no small feat, considering that energy costs are among the largest expenses for data centers. Credo’s Lark 850 optical DSP, consuming under 10W of power, is another example of its focus on high performance without sacrificing efficiency. By leveraging mature process nodes rather than the bleeding edge, Credo sidesteps supply chain headaches and brings products to market faster and more reliably.
The company’s vertical integration—controlling everything from intellectual property to system-level production—gives it a nimbleness that’s rare in such a capital-intensive sector. As Amazon and Microsoft scale their AI deployments, Credo’s ability to move quickly and maintain gross margins of 64.77% positions it as a high-margin outlier. With $236 million in cash and equivalents and a robust 33.4% R&D investment ratio, the company is well-armed to fund future innovation and fend off rivals like Broadcom and Marvell.
Of course, no story in the stock market is without its shadows. According to AInvest, Credo’s revenue remains heavily concentrated, with each of its top three customers contributing more than 10% of total revenue in the fourth quarter of 2025. This concentration risk means that any hiccup in these relationships could sting. Insider stock sales and a July 2025 downgrade from Wall Street Zen to “Hold” have also injected a dose of skepticism into the bullish narrative. Still, the broader industry currents are hard to ignore: with the global push for generative AI adoption and the approval of China-related AI licenses, Credo’s addressable market is expanding rapidly. Analysts are projecting revenue to top $800 million in fiscal 2026, fueled by new product launches and geographic expansion—plus, the company is eyeing new verticals in automotive and industrial applications.
But what about the electricity needed to make all this AI magic happen? That’s where another set of industrial giants steps into the spotlight. On August 19, 2025, Barchart.com and Zacks Investment Research reported a surge in demand for power solutions driven by the relentless growth of AI and data centers. According to The Globe and Mail, the International Energy Agency’s April 2025 report projected a significant jump in global power needs to support AI infrastructure. Natural gas, which still generates about a quarter of the world’s electricity, is poised to play a pivotal role.
GE Vernova Inc. (GEV) has emerged as a key beneficiary of this trend. The company’s Gas Power business, featuring aeroderivative turbines like the LM2500XPRESS, offers quick installation, scalable output, and lower emissions—ideal for the fast-growing, energy-hungry data center sector. For massive operations, GE Vernova’s heavy-duty gas turbines provide reliable, high-output performance with strong lifecycle economics. In July 2025, the company landed a major order to supply 29 LM2500XPRESS units to Crusoe AI data centers, a deal that highlights the critical role these turbines play in keeping the AI engines running.
The numbers tell the story: GE Vernova’s gas turbine sales soared by 213.3% in the second quarter and 11.8% in the first quarter of 2025, according to Barchart.com and Zacks. Shares of the company have surged 239.7% over the past year, far outpacing the industry’s 61.2% gain. While the company’s forward 12-month price-to-earnings ratio of 55.15X is notably higher than the industry average of 20.81X, investor enthusiasm remains high as the near-term earnings outlook continues to improve.
GE Vernova isn’t the only player looking to capitalize on the AI power boom. Siemens Energy, in partnership with Eaton, is building data centers with on-site power generation using its SGT-800 gas turbines, while Chevron has teamed up with GE Vernova to deliver 4 gigawatts of power by 2027 using seven 7HA gas turbines. Earlier in 2025, Chevron also joined forces with Engine No. 1 and GE Vernova to develop scalable, reliable natural gas power solutions for U.S.-based data centers.
For investors and industry watchers, the convergence of AI infrastructure and energy demand is creating new opportunities—and challenges. Companies like Credo Technology and GE Vernova are demonstrating that innovation, agility, and strategic partnerships are the keys to thriving in this rapidly evolving landscape. Yet, with high valuations and concentration risks lurking in the background, the road ahead will require careful navigation.
Still, for those willing to embrace both the promise and the uncertainty, the AI-driven data center revolution offers a front-row seat to the next chapter in technology and energy. The companies building the backbone and powering the grid are not just riding a trend—they’re helping to define the future of global computing.
