Credo Technology (CRDO)

Credo Technology data center thesis

Credo makes the Active Electrical Cables (AECs) and SerDes IP that connect GPUs inside an AI rack and across rack rows, the short-reach copper alternative to optical transceivers below ~7m. Revenue inflected from $190M (FY24) to $440M (FY25), turning operating income positive ($40M) at a 65% gross margin. The DustPhotonics acquisition extends Credo into silicon photonics, giving it a longer-reach optical path inside the same hyperscaler customer footprint.

Bull case

• Revenue more than doubled in one year ($190M to $440M, +132%) and operating income flipped from -$40M to +$40M, the cleanest break-out print in the AI back-end interconnect cohort and a 65% gross margin that supports a software-like multiple.
• AECs replace optical transceivers below 7m at materially lower power and cost; in a 120 kW AI rack, every watt saved on interconnect is a watt available for compute, which is why hyperscalers are designing AECs into Blackwell-and-beyond reference racks.
• DustPhotonics extends Credo from copper into silicon photonics for the longer-reach hop inside the same hyperscaler design, a wallet-share expansion at customers who already qualified Credo's SerDes IP and can shorten the qual cycle.

Bear case

• AECs serve a specific reach window (1-7m); if NVIDIA's NVLink Switch pulls more interconnect inside the chassis at NVL72-and-beyond scale, the addressable copper opportunity shrinks generation-over-generation.
• Stock at 67% of 52-week high and only +8% YoY despite the breakout fundamentals; the market is pricing the multi-year ramp aggressively. Any quarter that misses the $440M -> $700M+ trajectory triggers severe multiple compression on a 65% gross-margin name.
• Hyperscaler customer concentration is binary at this revenue scale; one PO push-out from Microsoft or Amazon resets the run-rate, and Credo's pricing power on AECs erodes once Marvell or Broadcom decides to bid the same sockets aggressively.

Thesis last reviewed 2026-05-09.

Credo Technology revenue and capex

In fiscal 2026, Credo Technology reported revenue of $1.3B, capital spending of $57.3M and operating income of $445.0M.

From annual reports filed with the SEC; the most recent was filed 2026-06-15.

Tracked Credo Technology data center projects

• AWS Project Rainier (New Carlisle), 2.2 GW est., New Carlisle, IN · operational
• Azure Northern Virginia, 1 GW est., Northern Virginia, VA · operational
• Google New Albany, 250 MW, New Albany, OH · operational
• Amazon Madison Mega Site, Canton, MS · operational

Other networking names tracked

• Applied Optoelectronics (AAOI)
• Arista Networks (ANET)
• Ciena Corp (CIEN)
• Coherent Corp (COHR)
• Fabrinet (FN)
• Lumentum Holdings (LITE)