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Credo Technology's Focus on Innovation to Augment Top-Line Momentum
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Key Takeaways
Credo launched ZeroFlap optical transceivers to boost reliability and efficiency in AI networks.
The new Bluebird DSP and 224G PAM4 SerDes expand Credo's high-speed optical portfolio.
Credo projects fiscal 2026 revenue to surge about 120% year over year with 40% non-GAAP margins.
Credo Technology Group Holding Ltd (CRDO - Free Report) continues to strengthen its position as a key player in the high-speed connectivity market through relentless innovation and a forward-looking approach to technology development. The company is steadily building momentum to drive long-term sales growth across AI, cloud and data center markets.
The company recently introduced its new ZeroFlap (ZF) optical transceiver product line, designed to deliver superior reliability, energy efficiency and stability for AI backend networks. Supporting 400G, 800G and 1.6T speeds, the ZF optical portfolio addresses a key industry challenge, optical link flaps, where connections repeatedly drop and reconnect, disrupting network performance.
The ZF transceivers mark a major step forward in optical system design. Built on Credo’s PILOT platform, the transceivers enhance reliability through system hardening, advanced telemetry and remote management, capabilities that are increasingly vital as AI cluster sizes exceed 1GW. With demand for bare-metal GPU instances limiting operators’ control over GPU-facing optics, Credo’s ZF transceivers provide a system-level solution that enables mission-mode link quality monitoring, transparent in-band messaging and on-transceiver event logging for real-time debugging and auditing.
The PILOT platform extensions, integrated within network switches, enable the extraction and streaming of optics telemetry data to monitoring agents. The initial implementation supports SONiC and other leading switch operating systems, facilitating enhanced visibility and management of optical network performance. Enhanced component hardening and proactive self-diagnostics further detect early signs of issues like laser degradation or ESD-related damage.
Credo’s recent product launches are expected to drive strong growth amid accelerating demand. In September 2025, it introduced its 224G PAM4 SerDes Intellectual Property (IP), fabricated on TSMC’s industry-leading N3 technology. Also, the company unveiled its high-performance, low-power Bluebird Digital Signal Processor (DSP) designed for 1.6Tbps optical transceivers.
The company’s optical business portfolio includes both DSP and LRO solutions, supporting port speeds of up to 1.6 terabits per second, in line with hyperscalers’ plans for next-generation network architectures. Credo is making significant investments in both copper and optical solutions to further diversify its market presence. The optical DSP segment, in particular, has maintained strong momentum, positioning Credo to potentially double its optical revenues again in the current fiscal year.
For fiscal 2026, Credo anticipates mid-single-digit sequential revenue growth, resulting in a roughly 120% year-over-year surge. CRDO had earlier expected total revenues to surpass $800 million, implying more than 85% year-over-year growth. Non-GAAP net margin is projected to be around 40% both in the upcoming quarters and for fiscal 2026.
Taking a Look at Innovation Strategy of CRDO’s Competitors
Broadcom Corporation (AVGO - Free Report) is a leading player in the semiconductor market based on its expanding product portfolio and multiple target markets. The company is benefiting from strong demand for its networking products and custom AI accelerators (XPUs). The company sees massive opportunities in the AI space as specific hyperscalers have started to develop their own XPUs. It believes that by 2027, each of Broadcom’s three hyperscalers will deploy 1 million XPU clusters across a single fabric. Serviceable Addressable Market for XPUs and network are expected between $60 billion and $90 billion in fiscal 2027.
Marvell Technology’s (MRVL - Free Report) strategic portfolio realignment underscores its sharpened focus on high-growth AI and cloud markets. The company is benefiting from the strong demand environment across the data center end market. Recently, Marvell introduced the industry's first 2nm 64 Gbps bi-directional die-to-die (D2D) interconnect. In the second quarter of fiscal 2026, the company began volume shipments of 200G per lane 1.6T PAM4 DSPs and ramped up its 51.2 Tbps switches while continuing strong demand for its 800G PAM DSPs. Management expects its electro-optics portfolio to deliver double-digit sequential growth in the third quarter, reflecting unmatched positioning in AI interconnect. In the longer term, Marvell is pushing boundaries with 400G per lane PAM technology, enabling 3.2T optical interconnects and future-proofing hyperscaler infrastructure. MRVL expects revenues to be $2.06 billion (+/- 5%) for the third quarter.
Image: Bigstock
Credo Technology's Focus on Innovation to Augment Top-Line Momentum
Key Takeaways
Credo Technology Group Holding Ltd (CRDO - Free Report) continues to strengthen its position as a key player in the high-speed connectivity market through relentless innovation and a forward-looking approach to technology development. The company is steadily building momentum to drive long-term sales growth across AI, cloud and data center markets.
The company recently introduced its new ZeroFlap (ZF) optical transceiver product line, designed to deliver superior reliability, energy efficiency and stability for AI backend networks. Supporting 400G, 800G and 1.6T speeds, the ZF optical portfolio addresses a key industry challenge, optical link flaps, where connections repeatedly drop and reconnect, disrupting network performance.
The ZF transceivers mark a major step forward in optical system design. Built on Credo’s PILOT platform, the transceivers enhance reliability through system hardening, advanced telemetry and remote management, capabilities that are increasingly vital as AI cluster sizes exceed 1GW. With demand for bare-metal GPU instances limiting operators’ control over GPU-facing optics, Credo’s ZF transceivers provide a system-level solution that enables mission-mode link quality monitoring, transparent in-band messaging and on-transceiver event logging for real-time debugging and auditing.
The PILOT platform extensions, integrated within network switches, enable the extraction and streaming of optics telemetry data to monitoring agents. The initial implementation supports SONiC and other leading switch operating systems, facilitating enhanced visibility and management of optical network performance. Enhanced component hardening and proactive self-diagnostics further detect early signs of issues like laser degradation or ESD-related damage.
Credo’s recent product launches are expected to drive strong growth amid accelerating demand. In September 2025, it introduced its 224G PAM4 SerDes Intellectual Property (IP), fabricated on TSMC’s industry-leading N3 technology. Also, the company unveiled its high-performance, low-power Bluebird Digital Signal Processor (DSP) designed for 1.6Tbps optical transceivers.
The company’s optical business portfolio includes both DSP and LRO solutions, supporting port speeds of up to 1.6 terabits per second, in line with hyperscalers’ plans for next-generation network architectures. Credo is making significant investments in both copper and optical solutions to further diversify its market presence. The optical DSP segment, in particular, has maintained strong momentum, positioning Credo to potentially double its optical revenues again in the current fiscal year.
For fiscal 2026, Credo anticipates mid-single-digit sequential revenue growth, resulting in a roughly 120% year-over-year surge. CRDO had earlier expected total revenues to surpass $800 million, implying more than 85% year-over-year growth. Non-GAAP net margin is projected to be around 40% both in the upcoming quarters and for fiscal 2026.
Taking a Look at Innovation Strategy of CRDO’s Competitors
Broadcom Corporation (AVGO - Free Report) is a leading player in the semiconductor market based on its expanding product portfolio and multiple target markets. The company is benefiting from strong demand for its networking products and custom AI accelerators (XPUs). The company sees massive opportunities in the AI space as specific hyperscalers have started to develop their own XPUs. It believes that by 2027, each of Broadcom’s three hyperscalers will deploy 1 million XPU clusters across a single fabric. Serviceable Addressable Market for XPUs and network are expected between $60 billion and $90 billion in fiscal 2027.
Marvell Technology’s (MRVL - Free Report) strategic portfolio realignment underscores its sharpened focus on high-growth AI and cloud markets. The company is benefiting from the strong demand environment across the data center end market. Recently, Marvell introduced the industry's first 2nm 64 Gbps bi-directional die-to-die (D2D) interconnect. In the second quarter of fiscal 2026, the company began volume shipments of 200G per lane 1.6T PAM4 DSPs and ramped up its 51.2 Tbps switches while continuing strong demand for its 800G PAM DSPs. Management expects its electro-optics portfolio to deliver double-digit sequential growth in the third quarter, reflecting unmatched positioning in AI interconnect. In the longer term, Marvell is pushing boundaries with 400G per lane PAM technology, enabling 3.2T optical interconnects and future-proofing hyperscaler infrastructure. MRVL expects revenues to be $2.06 billion (+/- 5%) for the third quarter.
CRDO’s Price Performance, Valuation and Estimates
Shares of CRDO have surged 263% in the past year compared with the Electronics-Semiconductors industry’s growth of 56.9%.
Image Source: Zacks Investment Research
In terms of the forward 12-month Price/Sales ratio, CRDO is trading at 21.62, higher than the Electronic-Semiconductors sector’s multiple of 9.55.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CRDO earnings for fiscal 2026 has been significantly revised upward over the past 60 days.
Image Source: Zacks Investment Research
CRDO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.