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Can Credo Technology Maintain Revenue Growth Amid the AI Boom?
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Key Takeaways
Credo more than tripled fiscal 2026 revenue to over $1.3B as AI infrastructure demand accelerated.
CRDO expects over 80% fiscal 2027 revenue growth, led by expanding optical connectivity products.
Credo sees optical portfolio topping $600M in fiscal 2027, with copper products driving growth too.
Credo Technology Group Holding Ltd (CRDO - Free Report) is benefiting from the rapid expansion of AI infrastructure, as increasing GPU cluster deployments are driving demand for advanced connectivity solutions. In fiscal 2026, the company generated more than $1.3 billion in revenue, more than tripling year over year, while non-GAAP net income increased more than fivefold to $662 million.
Fourth-quarter revenue reached a record $437 million, exceeding the company's total fiscal 2025 revenue. Management stated that these results reflect Credo's ability to capitalize on the ongoing shift in AI infrastructure, where connectivity has become increasingly important as AI clusters scale from tens of thousands to hundreds of thousands of GPUs. The company highlighted that reliability, power efficiency, signal integrity and telemetry have become critical requirements as AI infrastructure is increasingly constrained by connectivity rather than compute.
Credo continues to expand its portfolio across AI infrastructure, covering die-to-die, chip-to-chip, copper interconnects and facility-wide optical connectivity. The company stated that its vertically integrated approach, which combines SerDes technology, silicon, system-level solutions, firmware and telemetry software, enables it to support multiple generations of connectivity solutions. Active Electrical Cables (AECs) remain a key growth driver, supported by increasing customer adoption across hyperscalers and Neo cloud operators. The company also highlighted growing momentum in its retimer business, while continuing development of PCIe Gen 6 AECs and 200-gig-per-lane products.
Management expects fiscal 2027 to represent an inflection point for its optical business. The recently completed acquisition of Dust Photonics expands Credo's silicon photonics capabilities with technologies spanning 800G and 1.6T solutions and a roadmap extending beyond 3.2 terabits per second. The company expects its optical DSPs, silicon photonics PICs and ZeroFlap optics to each contribute more than $100 million in revenue during fiscal 2027, with the combined optical portfolio expected to generate more than $600 million. Credo also expects optical revenue growth to accelerate during the second half of the fiscal year while existing copper products, primarily AECs and retimers, continue contributing significantly to revenue growth.
For first-quarter fiscal 2027, Credo expects revenue between $465 million and $475 million. Management anticipates mid-single-digit sequential growth during the first half of the year, followed by stronger growth in the second half driven by the expanding optical portfolio. The company also expects more than 80% year-over-year revenue growth for fiscal 2027, with gross margins remaining broadly consistent with fiscal 2026 levels.
Credo continues investing in new products, including Active LED Cables and OmniConnect solutions, which are expected to begin production ramps in fiscal 2028. Management believes these investments, together with continued adoption by hyperscalers and the expanding Neo cloud customer base, position the company to benefit from the ongoing growth of AI infrastructure.
Taking a Look at CRDO’s Competitors
Broadcom Corporation’s (AVGO - Free Report) second-quarter fiscal 2026 revenues rose 48% year over year to $22.19 billion, driven by accelerating AI semiconductor revenues, which reached $10.8 billion, up 143% year over year. For the third quarter of fiscal 2026, Broadcom expects revenues of approximately $29.4 billion, indicating 84% year-over-year growth. Management also guided semiconductor revenues of roughly $20.5 billion and infrastructure software revenues of about $8.9 billion for the third quarter of fiscal 2026. Within semiconductors, management expects AI semiconductor revenues to accelerate to $16 billion in the third quarter of fiscal 2026, soaring more than 200% year over year, as demand for custom AI accelerators and AI networking remains strong.
Marvell Technology (MRVL - Free Report) is benefiting from AI-led demand across the data center end market, with custom silicon, interconnect, switching and optics driving record revenues and a higher multi-year outlook. The expanded NVIDIA partnership, including NVLink Fusion and optics collaboration, embeds Marvell deeper in hyperscaler roadmaps and supports program ramp. MRVL expects fiscal 2027 revenues to grow about 40% year over year to nearly $11.5 billion and sees fiscal 2028 revenues rising about 45% to roughly $16.5 billion. For the second quarter of fiscal 2027, Marvell Technology guided revenues to $2.7 billion (+/-5%).
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Can Credo Technology Maintain Revenue Growth Amid the AI Boom?
Key Takeaways
Credo Technology Group Holding Ltd (CRDO - Free Report) is benefiting from the rapid expansion of AI infrastructure, as increasing GPU cluster deployments are driving demand for advanced connectivity solutions. In fiscal 2026, the company generated more than $1.3 billion in revenue, more than tripling year over year, while non-GAAP net income increased more than fivefold to $662 million.
Fourth-quarter revenue reached a record $437 million, exceeding the company's total fiscal 2025 revenue. Management stated that these results reflect Credo's ability to capitalize on the ongoing shift in AI infrastructure, where connectivity has become increasingly important as AI clusters scale from tens of thousands to hundreds of thousands of GPUs. The company highlighted that reliability, power efficiency, signal integrity and telemetry have become critical requirements as AI infrastructure is increasingly constrained by connectivity rather than compute.
Credo continues to expand its portfolio across AI infrastructure, covering die-to-die, chip-to-chip, copper interconnects and facility-wide optical connectivity. The company stated that its vertically integrated approach, which combines SerDes technology, silicon, system-level solutions, firmware and telemetry software, enables it to support multiple generations of connectivity solutions. Active Electrical Cables (AECs) remain a key growth driver, supported by increasing customer adoption across hyperscalers and Neo cloud operators. The company also highlighted growing momentum in its retimer business, while continuing development of PCIe Gen 6 AECs and 200-gig-per-lane products.
Management expects fiscal 2027 to represent an inflection point for its optical business. The recently completed acquisition of Dust Photonics expands Credo's silicon photonics capabilities with technologies spanning 800G and 1.6T solutions and a roadmap extending beyond 3.2 terabits per second. The company expects its optical DSPs, silicon photonics PICs and ZeroFlap optics to each contribute more than $100 million in revenue during fiscal 2027, with the combined optical portfolio expected to generate more than $600 million. Credo also expects optical revenue growth to accelerate during the second half of the fiscal year while existing copper products, primarily AECs and retimers, continue contributing significantly to revenue growth.
For first-quarter fiscal 2027, Credo expects revenue between $465 million and $475 million. Management anticipates mid-single-digit sequential growth during the first half of the year, followed by stronger growth in the second half driven by the expanding optical portfolio. The company also expects more than 80% year-over-year revenue growth for fiscal 2027, with gross margins remaining broadly consistent with fiscal 2026 levels.
Credo continues investing in new products, including Active LED Cables and OmniConnect solutions, which are expected to begin production ramps in fiscal 2028. Management believes these investments, together with continued adoption by hyperscalers and the expanding Neo cloud customer base, position the company to benefit from the ongoing growth of AI infrastructure.
Taking a Look at CRDO’s Competitors
Broadcom Corporation’s (AVGO - Free Report) second-quarter fiscal 2026 revenues rose 48% year over year to $22.19 billion, driven by accelerating AI semiconductor revenues, which reached $10.8 billion, up 143% year over year. For the third quarter of fiscal 2026, Broadcom expects revenues of approximately $29.4 billion, indicating 84% year-over-year growth. Management also guided semiconductor revenues of roughly $20.5 billion and infrastructure software revenues of about $8.9 billion for the third quarter of fiscal 2026. Within semiconductors, management expects AI semiconductor revenues to accelerate to $16 billion in the third quarter of fiscal 2026, soaring more than 200% year over year, as demand for custom AI accelerators and AI networking remains strong.
Marvell Technology (MRVL - Free Report) is benefiting from AI-led demand across the data center end market, with custom silicon, interconnect, switching and optics driving record revenues and a higher multi-year outlook. The expanded NVIDIA partnership, including NVLink Fusion and optics collaboration, embeds Marvell deeper in hyperscaler roadmaps and supports program ramp. MRVL expects fiscal 2027 revenues to grow about 40% year over year to nearly $11.5 billion and sees fiscal 2028 revenues rising about 45% to roughly $16.5 billion. For the second quarter of fiscal 2027, Marvell Technology guided revenues to $2.7 billion (+/-5%).
CRDO Price Performance, Valuation and Estimates
Shares of CRDO are up 102.2% in the past three months compared with the Electronics-Semiconductors industry’s growth of 39.3%.
Image Source: Zacks Investment Research
Regarding the forward 12-month price/sales ratio, CRDO is trading at 17.48, higher than the industry’s multiple of 9.14.
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.