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Credo Powers AI Networks With New 1.6T ZeroFlap Optics Launch
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Key Takeaways
Credo launched 224G ZeroFlap optical transceivers supporting 1.6T port speeds and AI architectures.
The new design integrates DSPs with SiPho PICs to reduce insertion loss and improve link margin.
Credo expects optical revenue above $600 million in fiscal 2027, with growth across three product lines.
Credo Technology Group Holding Ltd. (CRDO - Free Report) is strengthening its position in the rapidly expanding AI networking market by launching its new family of 224G-based ZeroFlap (ZF) optical transceivers. The new products extend Credo’s ZF architecture to 1.6T port speeds and combine its 224G-per-lane optical DSP with the Kfir200 silicon photonics-based photonic integrated circuit (SiPho PIC) and latest-generation PILOT diagnostics platform. The products are available in 2xDR4, 2xFR4 and DR8 configurations, supporting a range of AI scale-out interconnect architectures.
The launch marks a key step in Credo’s optical roadmap, combining its proven DSP technology with advanced SiPho PICs for the first time in its transceiver portfolio. The combination is designed to improve optical performance through tighter integration between electrical and photonic components. Credo says the architecture can reduce insertion loss and improve link margin, potentially helping operators achieve higher network performance as AI clusters become more densely connected.
Credo is focusing on power efficiency, with its 224G architecture designed to support higher-density AI deployments while limiting the added energy burden of high-speed optical connectivity. Credo is also emphasizing interoperability. The PILOT telemetry extensions reside on network switches and support SONiC and other leading switch operating systems.
Following the DustPhotonics acquisition, Credo recognized its first SiPho PICs revenue, with 800G and 1.6T products ramping through the year. Credo expects a second-half fiscal 2027 inflection, with optical revenue topping $600 million and each of ZeroFlap Optics, SiPho PICs and optical DSPs exceeding $100 million, supporting more than 85% full-year revenue growth. Despite the opportunity, Credo faces strong competition across the high-speed optical networking market from stalwarts like Marvell Technology (MRVL - Free Report) and Astera Labs (ALAB - Free Report) .
CRDO’s Optical Competition Intensifies
MRVL’s optical DSP, switching and broadband businesses remain strong, with 800G demand solid and 1.6T ramping rapidly, expected to accelerate in fiscal 2028. Customers are initially using copper for scale-up networks, but as AI clusters expand, copper’s limited reach and bandwidth are pushing them toward optical interconnects and dedicated UALink, ESUN and NVLink switches. It is therefore investing heavily in next-generation optical interconnect and switching technologies. Marvell continues to see strong demand across optical DSPs, broadband analog, DCI modules and switching, with each tracking toward a $1 billion annualized revenue run rate. The scale-up opportunity remains large, with NPO, CPO and purpose-built switches supporting future growth.
Astera Labs is benefiting from rising demand for high-speed connectivity as AI infrastructure shifts toward larger rack-scale systems. Taurus, CXL, UALink, optical and custom connectivity programs broaden the longer-term content opportunity. Management plans to deliver UALink-enabled Scorpio X-Series switches in 2027, alongside signal conditioning solutions for copper and optical links. Its optical roadmap targets high-density fiber attach and near-packaged optics production in 2027, followed by co-packaged optical engines in 2028 and beyond. Third-quarter revenue is expected to be $540-$560 million, implying roughly 40% sequential growth, driven by Scorpio X-Series, Aries PCIe 6 and Taurus 800G shipments.
CRDO’s Price Performance, Valuation and Estimates
CRDO’s shares have gained 44.5% in the past six months compared with the Electronics-Semiconductors industry’s growth of 20.2%.
Image Source: Zacks Investment Research
On a forward 12-month price/sales basis, CRDO trades at 9.51, higher than the Electronics-Semiconductors industry multiple of 4.75.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CRDO earnings for fiscal 2027 has been revised upward over the past 60 days.
View the Zacks #1 Rank List
Image: Shutterstock
Credo Powers AI Networks With New 1.6T ZeroFlap Optics Launch
Key Takeaways
Credo Technology Group Holding Ltd. (CRDO - Free Report) is strengthening its position in the rapidly expanding AI networking market by launching its new family of 224G-based ZeroFlap (ZF) optical transceivers. The new products extend Credo’s ZF architecture to 1.6T port speeds and combine its 224G-per-lane optical DSP with the Kfir200 silicon photonics-based photonic integrated circuit (SiPho PIC) and latest-generation PILOT diagnostics platform. The products are available in 2xDR4, 2xFR4 and DR8 configurations, supporting a range of AI scale-out interconnect architectures.
The launch marks a key step in Credo’s optical roadmap, combining its proven DSP technology with advanced SiPho PICs for the first time in its transceiver portfolio. The combination is designed to improve optical performance through tighter integration between electrical and photonic components. Credo says the architecture can reduce insertion loss and improve link margin, potentially helping operators achieve higher network performance as AI clusters become more densely connected.
Credo is focusing on power efficiency, with its 224G architecture designed to support higher-density AI deployments while limiting the added energy burden of high-speed optical connectivity. Credo is also emphasizing interoperability. The PILOT telemetry extensions reside on network switches and support SONiC and other leading switch operating systems.
Following the DustPhotonics acquisition, Credo recognized its first SiPho PICs revenue, with 800G and 1.6T products ramping through the year. Credo expects a second-half fiscal 2027 inflection, with optical revenue topping $600 million and each of ZeroFlap Optics, SiPho PICs and optical DSPs exceeding $100 million, supporting more than 85% full-year revenue growth. Despite the opportunity, Credo faces strong competition across the high-speed optical networking market from stalwarts like Marvell Technology (MRVL - Free Report) and Astera Labs (ALAB - Free Report) .
CRDO’s Optical Competition Intensifies
MRVL’s optical DSP, switching and broadband businesses remain strong, with 800G demand solid and 1.6T ramping rapidly, expected to accelerate in fiscal 2028. Customers are initially using copper for scale-up networks, but as AI clusters expand, copper’s limited reach and bandwidth are pushing them toward optical interconnects and dedicated UALink, ESUN and NVLink switches. It is therefore investing heavily in next-generation optical interconnect and switching technologies. Marvell continues to see strong demand across optical DSPs, broadband analog, DCI modules and switching, with each tracking toward a $1 billion annualized revenue run rate. The scale-up opportunity remains large, with NPO, CPO and purpose-built switches supporting future growth.
Astera Labs is benefiting from rising demand for high-speed connectivity as AI infrastructure shifts toward larger rack-scale systems. Taurus, CXL, UALink, optical and custom connectivity programs broaden the longer-term content opportunity. Management plans to deliver UALink-enabled Scorpio X-Series switches in 2027, alongside signal conditioning solutions for copper and optical links. Its optical roadmap targets high-density fiber attach and near-packaged optics production in 2027, followed by co-packaged optical engines in 2028 and beyond. Third-quarter revenue is expected to be $540-$560 million, implying roughly 40% sequential growth, driven by Scorpio X-Series, Aries PCIe 6 and Taurus 800G shipments.
CRDO’s Price Performance, Valuation and Estimates
CRDO’s shares have gained 44.5% in the past six months compared with the Electronics-Semiconductors industry’s growth of 20.2%.
Image Source: Zacks Investment Research
On a forward 12-month price/sales basis, CRDO trades at 9.51, higher than the Electronics-Semiconductors industry multiple of 4.75.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CRDO earnings for fiscal 2027 has been revised upward over the past 60 days.
Image Source: Zacks Investment Research
CRDO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.