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Credo's leading AEC position and vertical integration keep its optics thesis bullish despite SpaceX moving away from 1.6T AECs. That shift is a genuine risk, but xAI has been in Credo's AEC ecosystem the longest, which could support ZeroFlap optics and its telemetry software. Credo's VCSEL-based ALCs were still ramping toward 2027, giving it another route as customers move to transceivers. x.com x.com x.com
Credo's optical backplane could make its microLED technology a surprise winner in in-rack scale-up by keeping links optical and electrical paths short. Its wide, slow approach could reach 6.4T without pushing the physics; NPO's shorter electrical runs could cut power by 60% versus copper. Senko's blind-mate connections could ease tray replacement. An ams OSRAM executive calls Credo a partner-customer on a live 1.6T ALC demo. Backplane production timing is unclear. x.com x.com x.com
MaxLinear's planned 1.6T AEC entry is too distant to justify the scale of Credo's selloff. Credo still has an estimated 90%+ AEC share and relationships with five of six major hyperscalers; MaxLinear expects initial revenue only in 2027 and a more meaningful ramp in 2028. Competition bears watching, but the market looks to be overreacting and Credo is starting to look ridiculously cheap. x.com x.com
Credo's case rests on expanding its share of the AI connectivity stack, not on AEC keeping its extraordinary growth. AEC remains its largest business, with healthy growth and deep ties to five hyperscalers. Optical expands rather than merely replaces it: optical DSP, silicon photonics PICs and ZeroFlap optics should bring over $600M of revenue in FY2027, so a smaller AEC share is fine if the company grows. After its microLED ALC reveal, Credo looks clearly undervalued. x.com x.com x.com x.com … Show more
MaxLinear's 1.6T roadmap threatens Credo's dominant AEC position with a specific share target. MaxLinear targets 20–30% of the 1.6T active electrical cable cycle, where its management estimates Credo has 93–99% share, initially across 1–2 US data centers. MaxLinear also reports 1.6T DSP and TIA design-win commitments, with initial revenue expected in 2027 and a stronger ramp in 2028. That competitive concern is behind Credo's pre-market drop. x.com
Credo's MicroVCSEL offers upside that does not appear priced in. Its copper and optics exposure, a SpaceX tailwind and fundamentals that look too good for its current valuation make it one of the tidiest AI infrastructure investments. x.com
Celestica's stronger hyperscaler switch and rack outlook points to more demand for Credo's AECs in the same buildout. Celestica beat its Q3 guide, raised FY26 and expects accelerating 2027 growth; that read-through suggests a strong Credo December print, a second-half FY27 inflection and likely a huge guide. x.com
Credo is a trade rather than a long-term hold because co-packaged optics is the technology that closes the copper-to-optics gap its retimers and active electrical cables fill. If CPO ramps faster than expected in the 2027 architecture cycle, those products get designed out. That is not a 2026 problem, but it is why a decelerating hyper-growth chipmaker can't keep a 15x sales multiple forever. Customer concentration, which hit the stock before, adds risk, and Credo fits no AI endgame theme. x.com … Show more
Credo is well placed if the US restricts Chinese optical transceivers from 3.2T, because it now has a full non-Chinese optical stack. Its $750M DustPhotonics acquisition brought in-house silicon photonics for 800G, 1.6T and 3.2T, including co-packaged optics, alongside its own DSPs and SerDes. If optics supply tightens, more short links stay on copper, which is Credo's AEC business. Management already expected optical lines to top $600M next year before this. x.com
Credo's near-total share of AI data-center cables and unchanged estimates make its lower multiple look like a fear-driven opportunity. Its stock went from 27x to 20x forward earnings while the supply chain building those systems guided 2027 revenue to double. Buyers this week will probably be very happy a year from now. x.com
Credo Technology's customer concentration is a hidden leverage risk investors underestimate. With four customers driving nearly all sales and two above 60%, Credo has little bargaining power if a hyperscaler demands lower prices, delays deployments, dual-sources or spends less, and any change could crush the stock. The AI boom hides this until growth normalizes. The business, economics and balance sheet are excellent and the valuation reasonable; much depends on how long the AI buildout lasts. … Show more
SpaceX's AI buildout could add substantially to Credo's revenue. If SpaceX really spends $400B on capex next year, that could add $2B for Credo. In that scenario, Credo would probably do at least $5B in FY2028 revenue; at roughly 50% net margins, EPS would be about $14 versus the sell side's $9, putting shares near 12x FY2028 EPS with EPS growing at a 130% CAGR across FY2027 and FY2028. x.com x.com
