Credo Technology (CRDO) Soars as its Finally Recognized as an Optics Leader

Stock (Symbol)

Credo Technology (CRDO)

Stock Price

$112

Sector

Data is as of

Expected to Report

Company Description

Credo Technology Group Holding Ltd delivers high-speed solutions to break bandwidth barriers on every wired connection in the data infrastructure market.

It provides high-speed connectivity solutions that deliver improved power efficiency as data rates and corresponding bandwidth requirements increase exponentially throughout the data infrastructure market.

Its connectivity solutions are optimized for optical and electrical Ethernet applications, including the emerging 100 gigabits per second (G), 200G, 400G, 800G and the emerging 1.6 terabits per second (T) port markets.

Its products are based on its Serializer/Deserializer (SerDes) and Digital Signal Processor (DSP) technologies.

Its product families include integrated circuits (ICs) for the optical and line card markets, active electrical cables (AECs) and SerDes Chiplets.

The Company’s intellectual property (IP) solutions consist primarily of SerDes IP licensing. Source: Refinitiv

Sharek’s Take

Optic cable stocks are the big thing in the stock market right now, and investors are now finally becoming aware of the Credo Technology (CRDO) optic story. Credo is the leader in high-speed connectivity cables for data center, and is developing more high-speed cable connections:

• Leading the way was Credo’s purple ZeroFlap Active Electric Cables (AECs) which connect GPU clusters in datacenters. In last qtr’s earnings call, management said AECs experienced strong growth with existing and new customers, including the company’s fifth hyperscaler customer. AECs are now the de facto standard for intra-rack and rack-to-rack connectivity up to 7 meters. Credo’s ZeroFlap AECs deliver up to 1000 times better reliability than laser-bases optics while consuming half the power.
• Up next, Credo is building new microLED cables with its Hyperlume acquisition. These Active LED cables (ALCs) will be optical cables that can reach up to 30 meters, versus 7 meters with the AECs. Management expects to have its first ALC products in 2027 with production ramping up in 2028.
• Yesterday, Credo announced its acquiring DustPhotonics, a maker of silicon photonic that integrates optical components into silicon chips. CRDO stock is up big on the news.

Credo Technology Group provides high-speed and power-efficient connectivity solutions for the data infrastructure market. The company’s products serve the hyperscale data center, AI compute, enterprise networking, and edge computing markets. Credo specializes in energy-efficient, high-performance SerDes (Serializer/Deserializer) and optical DSPs (Digital Signal Processor), which are foundational to unlocking the bandwidth demands of AI and cloud infrastructure. Credo is benefiting from a surge in demand tied to the AI build out cycle. Management has emphasized the acceleration of optical interconnect adoption, which is crucial for high-speed links between AI servers. Credo’s HiWire AECs are the de facto standard for interact connectivity. In last qrt’s earnings call, management outlined three major growth pillars that are expanding its business far beyond its two original connectivity products: Active Electrical Cables (AECs) and Integrated Circuits (ICs). Credo’s core AEC and IC business continue to grow, serving multibillion-dollar markets tied to AI data centers and high-speed networking. Credo now have five distinct high-growth connectivity pillars: AECs, IC solutions, ZeroFlap optics, Active LED cables (ALCs), and OmniConnect gearbox solutions. Credo recently acquired Hyperlume, which has a new active micro-LED cable (ALC) that uses less power, works over longer distances, and is easier to deploy in large AI data centers. This solves the latency issue (data delay).

Credo, a recent IPO from January 2022, is one of the tops stocks of 2025 as profits have climbed at a breathtaking pace. The stock has an Estimated Long-Term Growth Rate of 109%, and a P/E of just 24 when we look to 2026 profits. CRDO is a leading stock in the Growth Portfolio and Focus List.

One Year Chart

These charts and tables are from 3/10 when CRDO was $112. Today, 4/14, the stock is up 17% to $156. 

The Est. LTG is 109% this qtr, up from 85% last qtr. That’s still insanely high! Note, that’s an analyst estimate of what profits could grow over the next 3-5 years, not estimated stock growth.

The P/E of 24 is very reasonable. Note we are in the stock’s Fiacal Q4, so I calculated this figure using forward-year estimates ($4.74). 

Qtrly profit growth has been excellent! Notice the company is projected to maintain triple-digit profit growth. Top stocks often have triple-digit growth.

Earnings Table

• AI workloads continue to grow in parameter size, model complexity, and cluster scale, driving sustained transitions from 100 gig to 200 gig per lane and the 400 gig per line in the upcoming years.
• Active Electrical Cables (AECs) product line once again delivered strong growth, driven by existing customers and new wins, including Credo’s fifth hyperscaler.
• AECs are now the de facto standard for intra-rack and rack-to-rack connectivity up to 7 meters. increasingly displacing laser-based optical modules.
• ZeroFlap AECs deliver up to 1,000 times better reliability than commodity laser-based optics, while consuming roughly half the power.
• IC portfolio spans both optical and copper connectivity across 50 gig, 100 gig, and 200 gig per lane speeds.
• For Ethernet retimers, Credo is seeing significant growth with its 100 gig per lane solutions ani both traditional switching fabrics and the rapidly expanding AI server segment.

Annual Profit Estimates jumped this qtr. Ballooning profit estimates are a characteristic top stocks often possess. For 2026, management expects revenue growth to be ~50% year-over-year.

Qtrly Profit Estimates for the next 4 qtrs are 194%, 108%, 72%, and 14%. Analysts think revenue will grow 153% next qtr.

Fair Value

This qtr, with the stock priced at $112 a share, CRDO has a P/E of 34 when looking at current year estimates ($3.31).

My Fair Value P/E is 45, which is $213 a share when we plug in next year’s estimates ($4.74) giving the stock upside of 90% from the recent quote of $112.

Upside for 2027 is (was) a solid 133%. 

Note, CRDO has a Fiscal Year end of April 30th.

Bottom Line

Credo Technology (CRDO) has its IPO in 2022 and opened at $12 a share. The stock had its big breakout in October 2024 as it pushed past $40. Then it doubled, got cut in half, gone parabolic, corrected, and is now moving higher once again.

Credo’s got the best short-distance connectors for datacenters. Now its expanding its portfolio to include longer-range optical cables. Investors are finally noticing the opportunity this stock possess.

CRDO ranks 3rd in the Growth Portfolio and Focus List Power Rankings.

Power Rankings

3 of 29

Focus List

3 of 18

Conservative Stock Portfolio

N/A