Rasi Bhadramani/iStock via Getty Images Performance assessment Credo Technology Group Holding Ltd ( CRDO ) has risen 41% in less than 2 weeks. It looks like my 'Strong Buy' upgrade was very timely: Performance since HA's Last Article on CRDO (Seeking Alpha, HA's Last Article on CRDO) Elevator pitch In my last article on Credo, I noted how the company is foraying into the semiconductor optics/photo...
Rasi Bhadramani/iStock via Getty Images Performance assessment Credo Technology Group Holding Ltd ( CRDO ) has risen 41% in less than 2 weeks. It looks like my 'Strong Buy' upgrade was very timely: Performance since HA's Last Article on CRDO (Seeking Alpha, HA's Last Article on CRDO) Elevator pitch In my last article on Credo, I noted how the company is foraying into the semiconductor optics/photonics market via its ZeroFlap (ZF) Optics product. Just 1 week later, Credo announced a major M&A deal that doubles down on this new product category bet. In this piece, I will analyze this deal and its implications for Credo: The DustPhotonics acquisition can boost Credo's revenues and margins. The deal is at an attractive transaction multiple. Credo's balance sheet can easily handle the upfront cash consideration. The relative valuation discount has narrowed but is still below the comps median. CRDO stock may take a breather here. The DustPhotonics acquisition can boost Credo's revenues and margins DustPhotonics produces Silicon Photonics Photonic Integrated Circuits (SiPho PICs). Let's break that down: Silicon photonics means it uses light ( photon particles) to move and process information on silicon chips. This is similar in concept to fiber optic cables, which move data around using light instead of copper wires. Photonic integrated circuits (PICs) are the optical version of the electronic circuit. SiPho PICs are used in optical transceivers , which convert between electrical signals and light signals in circuits. This is how it fits into Credo's optical components portfolio: Credo's ZF Optics module (discussed in more depth in my last article ) requires 2 key components: An optical digital signal processor (DSP) that generates and cleans up electrical signals. A PIC that converts between electrical and optical signals. Credo already has the DSP capability in-house. But it currently buys PICs from other vendors. With the DustPhotonics acquisition, Credo not only adds a...
narvo vexar/E+ via Getty Images The Arqit Quantum Investment Thesis After the quantum computing sector saw a sharp decline in stock prices in recent months, following the initial hype, Arqit Computing Inc. ( ARQQ ) and the industry are now benefiting from the momentum generated by Alphabet's ( GOOG ) ( GOOGL ) research results. In fact, quantum computing may be closer than I thought it was last ye...
narvo vexar/E+ via Getty Images The Arqit Quantum Investment Thesis After the quantum computing sector saw a sharp decline in stock prices in recent months, following the initial hype, Arqit Computing Inc. ( ARQQ ) and the industry are now benefiting from the momentum generated by Alphabet's ( GOOG ) ( GOOGL ) research results. In fact, quantum computing may be closer than I thought it was last year. So, I must adjust my thesis. Previously, I thought we might have to wait ten years for quantum to be market-ready. Now, it could be as soon as two to three years. That's why I'm upgrading my rating from 'sell' to 'hold'. What was my previous coverage like? Seeking Alpha Rating History In my last article about Arqit from October 2025, I gave the company a sell rating. So far, this was the right call, as the shares have fallen by ~58% since then. My main arguments at the time were that the company had a high cash burn rate and that we were close to the peak of the hype. But in an area like quantum security, things can change rapidly, especially because AI could advance the field quickly. So, I would now like to check whether anything significant has changed since October. Arqit's preliminary H1/26 results Arqit Quantum's Investor Relations On April 10th, Arqit published its preliminary results for the first half of the 2026 fiscal year. With $620k to $630k, the first half of the year is already above the 2025 annual results of $530k. These results were driven by three new contracts , as well as the multi-year recurring revenue contracts that were already in place. The cash burn situation Data by YCharts As we can see in the above image of the preliminary results, the cash reserves stand at ~ $28 million as of March 31, 2026. The cash burn rate, shown here by the FCF (TTM), is also $28 million. So it's highly likely that there's a need for fresh capital. Data by YCharts This means that it is likely that the number of outstanding shares will continue to increase, as I do no...
Maximusnd/iStock via Getty Images The following segment was excerpted from the Greystone Capital Q1 2026 Letter To Clients. There are times when the market values businesses based more on what is easiest to measure, classify, or compare than on what actually drives their economics, causing a good business to appear mediocre when viewed through the wrong lens. This is especially true in throughput ...
Maximusnd/iStock via Getty Images The following segment was excerpted from the Greystone Capital Q1 2026 Letter To Clients. There are times when the market values businesses based more on what is easiest to measure, classify, or compare than on what actually drives their economics, causing a good business to appear mediocre when viewed through the wrong lens. This is especially true in throughput or volume-driven businesses, what Warren Buffett has often described as toll booth businesses, where the difference between a commoditized operator and a durable moat often doesn't show up in reported margins, consolidated financials, or industry classification, but rather in the unit economics. For a large swath of today's market participants, unit economics are not the driving force behind value discovery or price discovery. But in businesses like these, the incremental economics , what happens to the next unit of volume flowing through the system, are what matter most. The framework is simple. Once fixed capacity is built, the income statement shifts from a cost structure story to a volume story. That is the essence of toll-booth economics, where each additional unit moving through an existing infrastructure base carries very high incremental margins and converts efficiently into free cash flow. Over time, as utilization rises and the system matures, growth may slow, but the business becomes increasingly valuable because every additional user, gallon, or ton is monetized through a largely fixed-cost network. In the simplified example below, note what happens to the operating profit of the hypothetical business as volumes rise, even with price held constant. Because the fixed-cost base is already in place, each additional unit processed carries much higher incremental margins, causing profit to grow much faster than revenue. That is the power of operating leverage in a volume-driven toll booth business. Example A: Operating Leverage within a Volume Driven Toll Booth Busin...
Let me start by saying that Energy Transfer (NYSE: ET) is one of my favorite income stocks. I have held units of the master limited partnership (MLP) since 2020 and routinely add to my position. It's one of my largest sources of passive dividend income. However, I think investors seeking a safe income play should forget about Energy Transfer. Instead, they should buy midstream dividend giant Enbri...
Let me start by saying that Energy Transfer (NYSE: ET) is one of my favorite income stocks. I have held units of the master limited partnership (MLP) since 2020 and routinely add to my position. It's one of my largest sources of passive dividend income. However, I think investors seeking a safe income play should forget about Energy Transfer. Instead, they should buy midstream dividend giant Enbridge (NYSE: ENB) to collect its rock-solid income stream. Image source: The Motley Fool. Continue reading
Psychedelic Stocks Soar After Trump Order; RBC Says Commercialization Path Could Accelerate Psychedelic drug stocks soared in premarket trading in New York after President Trump signed an executive order aimed at accelerating research and expanding access to therapies used for post-traumatic stress disorder (PTSD). "The executive order I'm signing, we're actually signing the executive order today,...
Psychedelic Stocks Soar After Trump Order; RBC Says Commercialization Path Could Accelerate Psychedelic drug stocks soared in premarket trading in New York after President Trump signed an executive order aimed at accelerating research and expanding access to therapies used for post-traumatic stress disorder (PTSD). "The executive order I'm signing, we're actually signing the executive order today, is really a moment," Trump said at the signing event. "These treatments are currently in the advanced stages of clinical trials to ensure that they're both safe and effective for the American patients." President Trump signed an executive order directing the FDA to expedite review of psychedelic drugs like ibogaine, which advocates say could treat PTSD and other mental health conditions https://t.co/vBk8EoguVF pic.twitter.com/AEW6V2merr — Reuters (@Reuters) April 18, 2026 Trump's order, signed on Saturday, directs the FDA to prioritize review of certain breakthrough-designated psychedelic therapies, expands potential access under the Right to Try Act, commits at least $50 million in federal funding for state partnerships, and encourages closer coordination among HHS, the FDA, the VA, and private-sector researchers. "In many cases, these experimental treatments have shown life-changing potential for those suffering from severe mental illness and depression, including our cherished veterans," Trump said, citing the veteran suicide rate. The order also instructs the Justice Department to move quickly on rescheduling any psychedelic-based product that successfully completes Phase 3 trials and receives FDA approval. Trump continued, "And the nice part is we're actually doing this early, but it has been going on. Research has been going on for quite some time. But, you know, usually with things like this, nothing ever happens, no matter how the research ends up, but we're changing that. This order will clear away unnecessary bureaucratic hurdles, improve data sharing among the F...