Introduction

Scout Investments, Inc., an affiliate of Carillon Tower Advisers, shared insights in its “Carillon Scout Small Cap Fund” second quarter 2024 investor letter, highlighting the performance of small-cap stocks. The letter can be downloaded here. Despite a downturn in the small-cap growth market, certain sectors like consumer staples and communication services outperformed, while real estate and consumer discretionary lagged. The S&P 500 Index outperformed the Russell 2000® Index by nearly 7.6% during this period.

Spotlight on Credo Technology Group

Among the highlighted stocks was Credo Technology Group Holding Ltd (NASDAQ:CRDO), a provider of high-speed connectivity solutions for optical and electrical Ethernet applications. Despite a one-month return of -12.13%, its shares surged by 85.86% over the past year, closing at $28.51 per share with a market capitalization of $4.64 billion as of September 13, 2024.

“Credo Technology Group Holding Ltd (NASDAQ:CRDO) has thrived due to accelerating demand driven by artificial intelligence (AI), leading to increased sales to a second large hyperscale customer,” noted the Carillon Scout Small Cap Fund.

Investment Insights

Credo Technology Group Holding Ltd (NASDAQ:CRDO) was not listed among the 31 Most Popular Stocks Among Hedge Funds, yet it was held by 36 hedge fund portfolios by the end of the second quarter, up from 27 in the previous quarter. The company reported $59.7 million in revenues with a non-GAAP gross margin of 62.9% in the latest quarter. While Credo’s potential as an investment is acknowledged, AI stocks are seen as offering higher returns in a shorter timeframe. For those interested in AI stocks trading at less than five times earnings, consider exploring our report on the cheapest AI stock.

Conclusion

In a related article, we discussed Credo Technology Group Holding Ltd (NASDAQ:CRDO) as one of the best new tech stocks to consider. The NCG Small Cap Strategy initiated a position in Credo during Q2 2024. For more insights, visit our hedge fund investor letters Q2 2024 page.

For further reading, check out Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

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