Rich Peter
Investor, Crypto, US Stocks & High-Dividend ETFs
Credo solves AI clusters' biggest pain points, network reliability and power consumption, and is now adding a second growth curve in optics. Its active electrical cables deliver 1,000x the link reliability of optical transceivers at lower power and cost, critical as clusters scale to millions of GPUs. With DustPhotonics closed, management expects ZeroFlap optics, silicon photonics chips and optical DSPs each to exceed $100 million in FY2027 revenue, taking optics past $600 million. x.com
Credo is evolving from a component maker into a core part of AI hardware ecosystems while adding optics as a second growth engine. Its completed DustPhotonics acquisition pairs its DSP chips with silicon photonics, speeding 800G and 1.6T module development; analysts expect over $600 million of new optical revenue in fiscal 2027. Its ZeroFlap active electrical cables, with copper's cost and power edge and far more reliable than laser optics, will be embedded in Rebellions' RebelPOD AI clusters. x.com
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
Optical transceiver demand exceeds supply, and 1.6T lifts revenue per module for suppliers able to qualify capacity. Applied Optoelectronics raised at least $1.62B through 2026 ATMs; its last reported monthly capacity was 200,000 modules versus a year-end target above 650,000. Credo expects over $600M in FY2027 revenue across optical DSPs, PICs and modules, not modules alone. Shipments, yields and margins must prove out. Lumentum and Coherent already price in much expected growth. x.com
AI networking and optics growth underpins an extremely bullish outlook for Lumentum, Coherent, Marvell, Credo, Astera Labs and Broadcom. BofA estimates AI networking will grow from $95.6B in 2026 to $394B in 2030, with optical reaching $111B and co-packaged and near-packaged optics reaching $14.1B and $10.7B. Photonics is one of the most interesting investment themes for 2027 onward, though it is a complex market with many players. x.com
Optics and photonics should be among AI's biggest winners as faster GPU networks need optical connections that suppliers cannot expand quickly enough. Lumentum says some components are sold out through early 2029; Sivers is investing $30M to target more than 100M lasers a year, with operations expected in Q4 2027. Potential US restrictions on Chinese transceivers could reshape supply in 2027. Applied Optoelectronics and Sivers are the favorites. x.com x.com
Credo Technology sits right in the middle of the AI networking, connectivity and photonics theme, and Wall Street has just handed over an easy opportunity in it. The AI connectivity thesis keeps playing out across photonics, with FY26 revenue up 206% at 68% non-GAAP gross margins. x.com
Credo is one of the cheapest AI growth stocks, trading around 26x forward earnings after a hard correction while revenue grew 115% to $479M and full-year growth is guided above 85%. Margin worries mostly reflect DustPhotonics amortization and stock comp; non-GAAP gross margin held near 68%. DustPhotonics adds a second engine in optics, with over $600M expected this year, and Credo's low-laser designs can ship through the laser shortage. One customer at about a third of revenue is the main risk. … Show more
Credo's post-earnings selloff is overdone, reflecting normalizing hypergrowth and first-quarter DustPhotonics costs rather than any demand break. Q1 revenue rose 115% to $479M, its seventh straight triple-digit quarter, Q2 guidance of $525-535M beat the Street, and FY27 optical revenue is targeted at $600M+ as optics outgrows AECs. Management sees thousands of dollars of Credo content per GPU. Risks include customer concentration, Broadcom and Marvell in optical DSPs, and new AEC rivals. x.com … Show more
Credo's acquisition of DustPhotonics is strategically compelling, though the investable case is narrower than a generic move into optics. What is evidenced is tighter control of the silicon photonics PIC layer, better DSP-PIC co-design, stronger 800G and 1.6T pluggable positioning and more flexibility across AECs, optical DSPs and transceivers. Dust's revenue, margin and backlog are undisclosed, so the $500M+ FY27 optical target and EPS accretion are management framing, not proof. x.com
Credo was wrongly dismissed as a copper-era connectivity play, and analysts are finally recognizing its optical roadmap. Per @wallstengine, Evercore ISI initiated at Outperform with a $325 target, saying Credo will increasingly be seen as a broad copper and optical AI-connectivity play through optical DSPs, silicon photonics ICs, microLED cables and especially ZFOptics modules, taking the same systems approach as with AECs. The market had decimated it in late 2025 as a horse-and-buggy name. … Show more
Credo's selloff on a raise reflects impatience, since its next growth leg is a fiscal 2028 story that begins in May 2027. It printed $479M, guided $525-535M and lifted full-year growth to more than 85%, yet sold off for a second straight print. CEO Bill Brennan called fiscal 2027 just a stepping stone for optics: OmniConnect, micro-LED cables and near-package optics turn on in fiscal 2028, when AECs step up to 1.6T. x.com x.com
