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CRDO Bets on Optical Boom to Drive 80%+ Explosive Sales Growth in FY27
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Key Takeaways
CRDO revenue more than tripled to $1.3B in fiscal 2026 amid accelerating AI networking demand.
CRDO expects over $600M in optical revenue, with key products each topping $100M in fiscal 2027.
CRDO's Dust Photonics deal adds silicon photonics and supports 800G, 1.6T and future 3.2T roadmaps.
Following a breakout fiscal 2026 in which revenue more than tripled to $1.3 billion, Credo Technology Group Holding Ltd (CRDO - Free Report) is positioning itself as a key beneficiary of the AI networking boom. As hyperscalers and cloud providers race to build larger AI clusters, optical networking is becoming an increasingly important part of the infrastructure stack. This trend is creating an opportunity for Credo, whose portfolio includes AECs, optical DSPs, retimers and high-speed SerDes technologies designed for AI and cloud environments.
Momentum in Credo's optical DSP portfolio is accelerating, with rising design wins, growing revenue contribution and strong customer adoption of Robin and Cardinal. Additionally, the Dust Photonics acquisition enhanced Credo's optics portfolio with differentiated silicon photonics technology, providing strong design-win momentum and a roadmap that spans 800G, 1.6T and future 3.2T solutions, as well as beyond. The company believes that strong customer demand and market feedback support sustained long-term growth for its optical portfolio.
Driven by accelerating AI workloads, Credo expanded customer engagement and delivered growth more than twice its initial expectations in fiscal 2026. The company expects mid-single-digit sequential growth in the first half of fiscal 2027, followed by a stronger second-half ramp fueled by its optical portfolio. Management projects more than $600 million in optical revenue, with ZeroFlap optics, silicon photonics PICs and optical DSPs each contributing more than $100 million, supporting more than 80% year-over-year revenue growth for the full year.
Nevertheless, investors should also monitor customer concentration, competitive pressures from larger networking and semiconductor companies like Broadcom Corporation (AVGO - Free Report) and Marvell Technology (MRVL - Free Report) , and any moderation in AI-related capital spending.
How Aggressive are CRDO’s Peers in Their Growth Target?
Broadcom expects AI-driven growth to accelerate, fueled by strong demand for its custom AI processors and networking products. Management believes its secured supply chain capacity, expanding customer relationships and continued investments position it to exceed $100 billion in AI semiconductor revenue by 2027. AVGO’s AI networking solutions are gaining traction. For the fiscal second quarter, AI networking is expected to accelerate further and grow to 40% of total AI revenues. In scale-up, Broadcom’s Tomahawk 6 switch at 100 terabit per second, as well as 200G SerDes, is capturing demand from hyperscalers. The upcoming 400G SerDes in 2028 is also expected to help in expanding Broadcom’s clientele.
Marvell raised its fiscal 2027 outlook on strong data center demand and record bookings. It expects fiscal second-quarter revenue of $2.7 billion, up 12% sequentially and 35% year over year, with at least 10% sequential growth in both the fiscal third and fourth quarters. Management now expects quarterly revenue to reach $3 billion in the fiscal third quarter. For fiscal 2027, Marvell projects revenue growth of about 40% to nearly $11.5 billion, driven by roughly 50% growth in its data center business and more than 70% growth in its interconnect segment. Marvell expects fiscal 2028 revenue to increase 45% year over year from an elevated fiscal 2027 base.
CRDO Price Performance, Valuation and Estimates
Shares of CRDO are up 123.3% in the past three months compared with the Electronics-Semiconductors industry’s growth of 66.6%.
Image Source: Zacks Investment Research
Regarding the forward 12-month price/sales ratio, CRDO is trading at 20.65, higher than the industry’s multiple of 10.96.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CRDO earnings for fiscal 2026 has been revised up over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
CRDO Bets on Optical Boom to Drive 80%+ Explosive Sales Growth in FY27
Key Takeaways
Following a breakout fiscal 2026 in which revenue more than tripled to $1.3 billion, Credo Technology Group Holding Ltd (CRDO - Free Report) is positioning itself as a key beneficiary of the AI networking boom. As hyperscalers and cloud providers race to build larger AI clusters, optical networking is becoming an increasingly important part of the infrastructure stack. This trend is creating an opportunity for Credo, whose portfolio includes AECs, optical DSPs, retimers and high-speed SerDes technologies designed for AI and cloud environments.
Momentum in Credo's optical DSP portfolio is accelerating, with rising design wins, growing revenue contribution and strong customer adoption of Robin and Cardinal. Additionally, the Dust Photonics acquisition enhanced Credo's optics portfolio with differentiated silicon photonics technology, providing strong design-win momentum and a roadmap that spans 800G, 1.6T and future 3.2T solutions, as well as beyond. The company believes that strong customer demand and market feedback support sustained long-term growth for its optical portfolio.
Driven by accelerating AI workloads, Credo expanded customer engagement and delivered growth more than twice its initial expectations in fiscal 2026. The company expects mid-single-digit sequential growth in the first half of fiscal 2027, followed by a stronger second-half ramp fueled by its optical portfolio. Management projects more than $600 million in optical revenue, with ZeroFlap optics, silicon photonics PICs and optical DSPs each contributing more than $100 million, supporting more than 80% year-over-year revenue growth for the full year.
Nevertheless, investors should also monitor customer concentration, competitive pressures from larger networking and semiconductor companies like Broadcom Corporation (AVGO - Free Report) and Marvell Technology (MRVL - Free Report) , and any moderation in AI-related capital spending.
How Aggressive are CRDO’s Peers in Their Growth Target?
Broadcom expects AI-driven growth to accelerate, fueled by strong demand for its custom AI processors and networking products. Management believes its secured supply chain capacity, expanding customer relationships and continued investments position it to exceed $100 billion in AI semiconductor revenue by 2027. AVGO’s AI networking solutions are gaining traction. For the fiscal second quarter, AI networking is expected to accelerate further and grow to 40% of total AI revenues. In scale-up, Broadcom’s Tomahawk 6 switch at 100 terabit per second, as well as 200G SerDes, is capturing demand from hyperscalers. The upcoming 400G SerDes in 2028 is also expected to help in expanding Broadcom’s clientele.
Marvell raised its fiscal 2027 outlook on strong data center demand and record bookings. It expects fiscal second-quarter revenue of $2.7 billion, up 12% sequentially and 35% year over year, with at least 10% sequential growth in both the fiscal third and fourth quarters. Management now expects quarterly revenue to reach $3 billion in the fiscal third quarter. For fiscal 2027, Marvell projects revenue growth of about 40% to nearly $11.5 billion, driven by roughly 50% growth in its data center business and more than 70% growth in its interconnect segment. Marvell expects fiscal 2028 revenue to increase 45% year over year from an elevated fiscal 2027 base.
CRDO Price Performance, Valuation and Estimates
Shares of CRDO are up 123.3% in the past three months compared with the Electronics-Semiconductors industry’s growth of 66.6%.
Image Source: Zacks Investment Research
Regarding the forward 12-month price/sales ratio, CRDO is trading at 20.65, higher than the industry’s multiple of 10.96.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CRDO earnings for fiscal 2026 has been revised up 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.