Company Profile
Introduction
Founded in 2008 and headquartered in San Jose, California, Credo Technology (ticker: CRDO) is a provider of high-speed connectivity solutions for fiber optic and Ethernet applications.
Primary Business
Its products include ICs, active cables, and SerDes (SerDes) chiplets based on its serializer/deserializer (Serializer/Deserializer) and digital signal processor (DSP) technologies. The company is a global leader in high-speed SerDes technology, used in switch chips and optical transmission modules for large data centers. The company also develops and licenses high-speed SerDes IP.
Initial Public Offering
Credo Technology listed on the Nasdaq Stock Exchange on January 27, 2022, with its initial public offering priced at $10.00 per share.
What makes the company so successful?
Breaking the bottleneck of data transmission
Credo is committed to breaking bandwidth barriers in the data infrastructure market. As data rates and corresponding bandwidth demands increase exponentially across the data infrastructure market, Credo provides secure, high-speed connectivity solutions that improve energy efficiency.
The Importance of AEC to the Company
Credo’s success stems largely from its unrivaled leadership in the AEC market. AEC, a copper-based connectivity technology invented by Credo, is used to connect AI servers to network switches and is a critical component for high-speed data transmission within AI data centers. Compared to traditional optical cables, AEC is considered more reliable and consumes less power; it also supports longer transmission distances than traditional passive copper cables.
Market Share
According to research firm 650 Group, Credo held a 73% share of the AEC market by the second quarter of 2025. As the market shifts to rack-mount servers with higher GPU densities, such as Nvidia’s GB200 NVL72, the demand for AECs needed to connect large clusters of AI servers will increase significantly.
Key Products
Active Cables (AECs)
One of Credo’s popular products is its Active Cable (AEC) series, which provides high-speed connectivity solutions for data centers and enterprises with burgeoning AI and cloud computing needs.
Credo invented AECs, copper-based cables used to connect AI servers to network switches. They are more reliable and consume less power than optical cables, and can reach longer distances than traditional passive copper cables.
The company’s HiWire Active Cables (AECs) provide efficient, high-bandwidth connectivity between servers to support AI workloads and large-scale data processing.
DSP Chipsets
Credo also produces digital signal processing (DSP) chipsets that facilitate high-bandwidth data transmission with low power consumption. Specifically, Credo’s SerDes (SerDes) and DSP chips optimize data transmission by enabling high-speed, error-free communication within data centers.
On September 9, the company announced the launch of the Bluebird DSP for 1.6Tbps optical transceivers. They say this is a breakthrough that will enable “energy-efficient PAM4 data transmission at 224Gbps per lane, which is essential for unleashing the advanced computing power of state-of-the-art GPU chips.”
Custom Chips for AI Data Centers
In mid-October, Credo announced its integration into Arm’s Total Design ecosystem, aiming to accelerate the development of customized chips for AI data centers.
By joining Arm’s ecosystem, Credo contributes its advanced portfolio of high-speed connectivity IP, including chip technologies such as SerDes. These chips can be combined with Credo’s Neoverse computing subsystem processor architecture to improve overall data transfer performance.
In a statement, the company said, “The combination of Credo IP and chiplets with Arm’s processor architecture allows customers to rapidly design innovative silicon solutions for next-generation AI, cloud computing and hyperscale data center applications,”
Application Areas
Credo Technology is a leading supplier of high-performance serial connectivity solutions for hyperscale data centers, 5G operators, enterprise networks, HPC (high-performance computing), and the AI/ML markets.
The Company’s Core Technology
Leaping from Hardware to Software
Credo is rapidly evolving from a hardware-focused cable and chip supplier to a critical operational intelligence layer for AI infrastructure. Its Pilot software transforms single deployments into self-optimizing systems.
If the Pilot platform continues to embed operational intelligence at scale, the company’s revenue is expected to grow by 45-50%, with net profit margins approaching 50%, potentially driving its stock price to $375-450 per share. Even under more conservative scenarios, strong platform adoption and hardware execution support 35-40% growth and sustainable profit margins. Credo’s growth trajectory presents a unique opportunity to invest in the emerging AI infrastructure orchestration layer, where the true value lies in the intelligence embedded in critical systems, not the physical components themselves.
Innovative Algorithms
Each deployment feeds operational intelligence back into the system, improving performance for all users and eliminating high switching costs. Credo’s universal, protocol-agnostic approach and end-to-end control (from SerDes IP to system-level optimization) enables the company to scale from intra-rack to inter-rack connectivity, creating scalable, software-like economics with high margins and asymmetric upside.
Patent settlements with ecosystem partners reinforce Credo’s controlled openness strategy, enabling broader adoption without sacrificing competitive advantage.
Technology Trends Favor Credo
A number of key trends are driving the data infrastructure market, such as cloud workloads, streaming video, 5G wireless deployments, the expansion of the Internet of Things (IoT), and most notably, the growing adoption of artificial intelligence. These trends are driving explosive data growth, placing significant pressure on existing infrastructure and forcing a significant transformation.
The rapid adoption of artificial intelligence (AI) and the need for efficient data center connectivity are driving increased demand for Credo products among the top builders of the AI economy. With the market shifting to rack-mount servers with higher GPU density, AECs are currently at their peak performance. Connecting larger clusters of AI servers will require even more AECs.
Why are Credo’s AECs more efficient than other cables?
Credo’s active optical cables (AECs) excel in modern data center environments with their superior efficiency and performance, especially compared to traditional direct-attach copper cables (DACs) and active optical cables (AOCs). Here are a few key factors:
Substantial Energy Savings
Credo’s AECs consume approximately 50% less power than traditional DACs and significantly less than AOCs, making them highly energy-efficient.
For example, its second-generation HiWire LP SPAN AECs reduce power consumption by nearly half compared to the previous generation while increasing cable reach by 40%.
Thinner, More Flexible Cables
Credo’s AECs utilize thinner copper cables (as thin as Category 6), reducing cable size by up to 75% compared to passive DACs. This makes them easier to route and manage in dense data center environments.
Thinner, lighter cables also support longer distances and tighter bend radii, which are critical for modern rack-to-rack and server-to-switch connections.
Superior Performance and Reliability
Credo AECs integrate a digital signal processor (DSP) and retimer to provide improved signal integrity, enabling higher data rates (up to 800G and 1.6T) over longer distances without sacrificing performance.
These cables offer exceptional reliability, with a mean time between failures (MTBF) of up to 100 million hours, minimizing downtime and maintenance requirements.
Plug-and-Play
Credo AECs are hot-swappable, easy to deploy, and can directly replace AOCs and DACs without the need for additional components or complex configuration. They also support advanced features such as dual top-of-rack (TOR) redundancy, enhancing reliability in hyperscale data centers.
Reduced Environmental Impact
By reducing power consumption and reducing the use of plastic and copper, Credo AEC helps customers reduce their environmental impact.
What Makes Credo Competitive?
AEC Technology
Demand for Credo’s AECs is growing because they offer 1,000 times greater reliability than optical solutions while consuming 50% less power. Significantly fewer link fabrication or intermittent connectivity outages improve cluster reliability while reducing power consumption. The shift from intra-rack to rack-to-rack deployments is expected to further boost revenue for this product line. Furthermore, its system-level approach provides a strong competitive advantage.
Complete Transport Solutions
Credo offers a complete portfolio of SerDes IP, retimer ICs, and system-level design, certification, and production systems. This integrated approach shortens innovation cycles and improves cost efficiencies.
Continuously Expanding Product Portfolios
In addition to its AEC product line, Credo is investing heavily in copper and fiber solutions to diversify its market position. Its fiber DSP division maintains strong growth momentum and expects to double its fiber revenue again this fiscal year. Bluebird DSP for 1.6Tbps optical transceivers we mentioned before is its latest release on this move.
Credo recently partnered with the Arm Total Design ecosystem to integrate its high-speed SerDes and mixed-signal DSP IP (including SerDes chipsets) with Arm processor technology. This integration will enable faster and more efficient design of custom silicon solutions for next-generation AI, cloud computing, and hyperscale data center applications.
Customers
Top Customers
According to Needham data, Amazon, Microsoft, and Elon Musk’s xAI are all major Credo customers. They use Credo’s AEC to support artificial intelligence and cloud infrastructure, with Amazon currently being the company’s largest single customer. These tech giants’ significant investments in AI infrastructure have directly translated into strong demand for Credo’s products.
Other Customers
Credo is expanding its customer base to include all major tech companies, from Apple to Tesla, as well as several large enterprises in the energy and education sectors.
Competitors
Broadcom
Broadcom offers a broad portfolio of high-speed interconnect, networking, storage, and data center semiconductor solutions, which overlaps with Credo’s focus on high-speed data connectivity and SerDes technology. With its size and scale, Broadcom has established a formidable competitive advantage in this space and poses a credible threat.
For more information on Broadcom, please see my posts of “Significant changes in Broadcom’s business approach” and “The reasons behind Broadcom share price consistantly outperformance“
Marvell
Marvell specializes in networking, storage, and data infrastructure semiconductors, areas that align closely with Credo’s target markets. This overlap means Credo must establish differentiation (for example, in energy efficiency and SerDes performance) to gain a foothold.
For more information on Marvell, please see my post of “How low-key Marvell makes money?“
Astera Labs
Astera Labs is considered a competitor in the high-speed connectivity, active cabling, and rack-level interconnect sectors.
For companies like Credo, which specialize in active cabling and optical DSP, Astera is one of its most direct niche competitors.
For more information on Astera Labs, please see my post of “How Astera Labs, AI high-speed transmission expert, make money? ”
Synopsys and Cadence
Although both companies’ primary businesses are EDA (electronic design automation) rather than connectivity chips, they may not compete head-on in the same product suite, but rather in the broader semiconductor IP and high-speed data fabric ecosystem.
For more information on Synopsys and Cadence, please see my posts of “Three EDA oligopoly vendors: Synopsys, Cadence, and Siemens’s Mentor Graphics“, “How does, the EDA oligopoly, Cadence make money?“, “How does Synopsis, the EDA oligopoly, make money?“
Operating Performance
Q2 2025 Financial Report
On September 3, 2025, Credo announced its first-quarter fiscal 2026 results, which far exceeded expectations. Revenue increased 274% year-over-year to $223.1 million, and adjusted earnings per share of $0.52 significantly exceeded market expectations. Key financial highlights are as follows:
- Revenue: $223.1 million, up approximately 274% year-over-year and 31% quarter-over-quarter.
- GAAP gross margin: 67.4%. Non-GAAP gross margin: 67.6%.
- GAAP operating expenses: $89.6 million. Non-GAAP operating expenses: $54.5 million.
- GAAP net income: $63.4 million. Non-GAAP net income: $98.3 million.
- GAAP diluted earnings per share (EPS): $0.34. Non-GAAP diluted EPS: $0.52.
- Cash and short-term investments at the end of the quarter: $479.6 million.
Key points from the management
Credo cited “deep strategic partnerships with hyperscale operators and key customers” as the driver of growth.
Credo highlighted growing demand for “reliable and efficient connectivity solutions” in the artificial intelligence, cloud computing, and hyperscale networking sectors as the fundamental reason for its growth.
CEO Bill Brennan stated that the company “continued its strong growth trajectory” and viewed the 31% sequential growth as confirmation of this momentum.
Future Outlook
Credo CEO Bill Brennan stated, “Given the growing demand for reliable and energy-efficient connectivity solutions, we expect continued revenue growth and diversification across customers, protocols, and applications.”
In an interview with Barron’s following the release of its second-quarter 2025 earnings report, CEO Brennan stated that Credo is developing system-level optical connectivity solutions focused on providing customers with enhanced reliability and greater energy efficiency. He also stated that Credo sees a “significant opportunity” to win business with the six largest hyperscale data center operators in the United States.
Its revenue is primarily driven by the surge in downstream AEC volumes, with the vast majority of AEC shipments based on AI applications. “It is expected that all US hyperscale customers will utilize AEC in some form in the long term.”
Capital Market Performance
Market Valuation
As of October 22, 2025, the company’s market capitalization is $23.73 billion, with a price-to-earnings ratio of 202.
Stock Price Performance
As of October 22, 2025, Credo’s stock price has performed exceptionally well since 2025, increasing approximately 94% year-to-date. In less than four years since its IPO, the stock price has risen 1,126%.
Investment Risks
High Market Expectations
Credo’s stock price performance has been exceptional, increasing approximately 94% since 2025 and 1,126% since its IPO. Market expectations are rising. If the company’s operations falter and fail to meet investor expectations, the stock price will inevitably plummet overnight. Investors should exercise caution if investing now.
Can this performance be sustained? For the company’s management team, recent impressive operational performance inevitably presents significant execution risks. Such rapid growth often brings challenges with scaling, supply chain constraints, margin pressure, and competitive pressure.
Product line is not diversified
While Credo has benefited from the recent AI boom, its product line is limited in diversification, focusing solely on high-speed transmission. Any emergence of competitive competitors to existing products would immediately impact revenue.
Over-Concentration of Customers
Credo’s over-reliance on major hyperscale customers has concentrated its business growth, posing significant risks to delivery times for any customer. Losing any major customer would result in significant revenue losses for the company.
I am the author of the original text, the essence of this story was originally featured on Money Magazine, Issue of December 2025
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