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Does Credo's $525M-$535M Revenue Outlook Signal Further Upside?
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Key Takeaways
Credo posted record Q1 revenues of $479M, up 115% y/y, marking seven quarters of triple-digit growth.
CRDO expects Q2 revenues of $525M-$535M, driven by demand for AECs, optical DSPs and retimer solutions.
Credo sees fiscal 2027 optical revenues topping $600M and a non-GAAP net margin of approximately 50%.
Credo Technology Group Holding Ltd (CRDO - Free Report) is benefiting from rising investments in AI infrastructure, increasing demand for high-speed connectivity solutions and expanding customer engagement. The company delivered a record performance in the first quarter of fiscal 2027, supported by strong demand across its product portfolio. Management's second-quarter revenue guidance of $525 million to $535 million, along with expectations of sustained growth throughout fiscal 2027, highlights the potential for further business expansion.
Credo reported revenues of $479 million in the first quarter of fiscal 2027, up 10% sequentially and 115% year over year. The company also recorded a non-GAAP gross margin of 68% and non-GAAP net income of $236.3 million, more than double the year-ago quarter. Strong revenue growth across customers, coupled with disciplined expense management and continued research and development investments, supported profitability. This performance marked the company's seventh consecutive quarter of triple-digit year-over-year revenue growth.
Credo expects second-quarter fiscal 2027 revenues between $525 million and $535 million, with non-GAAP gross margin projected at 67-69%. The outlook reflects continued demand for its active electrical cables (AECs), optical digital signal processors (DSPs) and retimer solutions. AECs remain the company's largest business, supported by deeper penetration among existing customers, new customer additions and increasing bandwidth requirements in next-generation AI clusters. Meanwhile, the optical business is emerging as a major growth driver.
Management expects optical revenues to exceed $600 million in fiscal 2027, with ZeroFlap Optics, silicon photonics photonic integrated circuits (PICs) and optical DSPs each contributing more than $100 million. Customer engagement remains strong, while production shipments and new product ramps are expected to support growth. Credo is also expanding its portfolio with near-package optics, active LED cables and OmniConnect solutions, creating additional opportunities as AI infrastructure and inference workloads evolve.
For fiscal 2027, Credo expects total revenue growth of more than 85% year over year and a non-GAAP net margin of approximately 50%. Although supply-chain requirements, customer concentration and execution challenges remain important considerations, the company's expanding portfolio and strong demand outlook support its growth prospects. The $525 million-$535 million revenue forecast signals continued momentum, while the anticipated optical ramp and emerging product opportunities could provide further upside as Credo scales its business.
Taking a Look at CRDO’s Competitors
Broadcom (AVGO - Free Report) is benefiting from expanding AI infrastructure spending, with custom XPUs and networking driving semiconductor growth while VMware supports infrastructure software. Multiyear engagements with six XPU customers, broader Ethernet adoption and rising AI deployments provide long-term revenue visibility. Broadcom now expects fiscal 2026 AI semiconductor revenues of $58 billion, up 186% year over year and above its prior $56 billion outlook. The company has secured supply to support roughly $115 billion of AI semiconductor revenues in fiscal 2027. AVGO also expects fiscal 2028 AI semiconductor revenues to reach $230 billion. The company said demand exceeds its fiscal 2027 outlook, while deployment timing depends on factors including data-center readiness, leading-edge silicon, substrates and memory supply.
Marvell Technology (MRVL - Free Report) is benefiting from rising AI infrastructure demand, with custom silicon, interconnect, switching and optics supporting record data center revenues and a higher multi-year outlook. Management now expects faster growth through fiscal 2028 as custom programs broaden and scale-up networking gains traction. The NVIDIA relationship and recent acquisitions expand Marvell’s role across next-generation AI architectures, while the communications and other segment provides some diversification. For the third quarter of fiscal 2027, Marvell forecasts revenues of $3.15 billion (+/-5%), implying about 15% sequential growth at the midpoint. Management raised its fiscal 2027 revenue outlook to roughly $12 billion, suggesting about 45% growth, from the prior view of around $11.5 billion. For fiscal 2028, MRVL lifted its revenue forecast to approximately $18 billion, up $1.5 billion from its prior outlook, with growth expected at about 50% year over year.
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Does Credo's $525M-$535M Revenue Outlook Signal Further Upside?
Key Takeaways
Credo Technology Group Holding Ltd (CRDO - Free Report) is benefiting from rising investments in AI infrastructure, increasing demand for high-speed connectivity solutions and expanding customer engagement. The company delivered a record performance in the first quarter of fiscal 2027, supported by strong demand across its product portfolio. Management's second-quarter revenue guidance of $525 million to $535 million, along with expectations of sustained growth throughout fiscal 2027, highlights the potential for further business expansion.
Credo reported revenues of $479 million in the first quarter of fiscal 2027, up 10% sequentially and 115% year over year. The company also recorded a non-GAAP gross margin of 68% and non-GAAP net income of $236.3 million, more than double the year-ago quarter. Strong revenue growth across customers, coupled with disciplined expense management and continued research and development investments, supported profitability. This performance marked the company's seventh consecutive quarter of triple-digit year-over-year revenue growth.
Credo expects second-quarter fiscal 2027 revenues between $525 million and $535 million, with non-GAAP gross margin projected at 67-69%. The outlook reflects continued demand for its active electrical cables (AECs), optical digital signal processors (DSPs) and retimer solutions. AECs remain the company's largest business, supported by deeper penetration among existing customers, new customer additions and increasing bandwidth requirements in next-generation AI clusters. Meanwhile, the optical business is emerging as a major growth driver.
Management expects optical revenues to exceed $600 million in fiscal 2027, with ZeroFlap Optics, silicon photonics photonic integrated circuits (PICs) and optical DSPs each contributing more than $100 million. Customer engagement remains strong, while production shipments and new product ramps are expected to support growth. Credo is also expanding its portfolio with near-package optics, active LED cables and OmniConnect solutions, creating additional opportunities as AI infrastructure and inference workloads evolve.
For fiscal 2027, Credo expects total revenue growth of more than 85% year over year and a non-GAAP net margin of approximately 50%. Although supply-chain requirements, customer concentration and execution challenges remain important considerations, the company's expanding portfolio and strong demand outlook support its growth prospects. The $525 million-$535 million revenue forecast signals continued momentum, while the anticipated optical ramp and emerging product opportunities could provide further upside as Credo scales its business.
Taking a Look at CRDO’s Competitors
Broadcom (AVGO - Free Report) is benefiting from expanding AI infrastructure spending, with custom XPUs and networking driving semiconductor growth while VMware supports infrastructure software. Multiyear engagements with six XPU customers, broader Ethernet adoption and rising AI deployments provide long-term revenue visibility. Broadcom now expects fiscal 2026 AI semiconductor revenues of $58 billion, up 186% year over year and above its prior $56 billion outlook. The company has secured supply to support roughly $115 billion of AI semiconductor revenues in fiscal 2027. AVGO also expects fiscal 2028 AI semiconductor revenues to reach $230 billion. The company said demand exceeds its fiscal 2027 outlook, while deployment timing depends on factors including data-center readiness, leading-edge silicon, substrates and memory supply.
Marvell Technology (MRVL - Free Report) is benefiting from rising AI infrastructure demand, with custom silicon, interconnect, switching and optics supporting record data center revenues and a higher multi-year outlook. Management now expects faster growth through fiscal 2028 as custom programs broaden and scale-up networking gains traction. The NVIDIA relationship and recent acquisitions expand Marvell’s role across next-generation AI architectures, while the communications and other segment provides some diversification. For the third quarter of fiscal 2027, Marvell forecasts revenues of $3.15 billion (+/-5%), implying about 15% sequential growth at the midpoint. Management raised its fiscal 2027 revenue outlook to roughly $12 billion, suggesting about 45% growth, from the prior view of around $11.5 billion. For fiscal 2028, MRVL lifted its revenue forecast to approximately $18 billion, up $1.5 billion from its prior outlook, with growth expected at about 50% year over year.
CRDO Price Performance, Valuation and Estimates
CRDO’s shares are up 31.9% in the past month compared with the Electronics-Semiconductors industry’s growth of 2.8%.
Image Source: Zacks Investment Research
Credo is trading at a forward 12-month price/earnings ratio of 30.41, higher than the Electronics-Semiconductors sector’s multiple of 12.75.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CRDO earnings for fiscal 2027 has seen a 4.2% upward revision 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 Rank (Strong Buy) stocks here.