Credo Technology (CRDO) raised its fiscal 2027 revenue growth guidance to 85% year-over-year at the Goldman Sachs Communacopia + Technology Conference 2026, citing surging demand for optical interconnects in AI data centers and a roadmap of products expected to commercialize over the next two years.
The San Jose-based company, which has a market capitalization of approximately $31.6 billion, reported trailing twelve-month revenue of $1.59 billion, up 165% year-over-year. Revenue at its initial public offering two years ago was under $200 million. Credo posted six consecutive quarters of sequential growth exceeding 20% before entering fiscal 2027 with a run rate above $1.3 billion.
CEO Bill showed investors a roadmap of accelerating sequential growth through fiscal 2027: more than 10% in the first quarter on approximately 68% gross margin, 11% in the second quarter with gross margin held at 68%, 20% in the third quarter, and 30% in the fourth quarter.
"That sets you up where a billion-dollar quarter is within our sights within early fiscal 2028," CFO Dan said during the conference presentation.
A central thesis of Credo's case was the structural shift from copper to optical connectivity in longer-reach data center links. Copper still accounts for roughly 95% of data center connections — the same proportion from 12 years ago, CEO Bill noted — but optical modules for cables 7 meters and longer are expected to grow from 60 million units this year to 175 million by 2030. Credo plans to produce hundreds of thousands of optical units per month by the end of fiscal 2027 and double and triple that output rate by fiscal 2028.
The company developed its ZeroFlap Optics platform jointly with xAI and Oracle. According to Credo, the technology helped xAI bring an AI cluster online in five days — compared to six to eight weeks previously — while maintaining 99.9% uptime. The system continuously measures telemetry across six links per GPU-to-switch connection, tracking signal quality metrics including eye height, signal-to-noise ratio, and bit error rates after forward error correction.
Credo also revealed progress on its Active Link Cable product, built around a micro-emitter technology the company has been developing for three years. ALCs are designed to extend reach from 7 meters — the limit of Credo's existing active electrical cables — to 30 meters with comparable reliability and power efficiency, while being 75% smaller in total volume than 7-meter AECs at 200G per lane speeds. Qualification runs are underway through fiscal 2027, with production ramp expected in fiscal 2028.
Operating expenses are expected to rise 55% in fiscal 2027, though top-line growth is projected to outpace OpEx expansion by roughly 50%. Gross profit margins are guided to remain near 68%.
Credo reported three recent strategic acquisitions — a MicroLED technology team in Canada, CoMira for protocol and security, and DustPhotonics for silicon photonics PIC technology — as part of its capability-building strategy.
The company also disclosed its optics revenue target of $600 million for fiscal 2027.
Shares closed at $162.95 on Sept. 11, up 1.65%, and traded at $163.38 in after-hours sessions.
"We self-identify as a connectivity company that is agnostic to the medium," CEO Bill said. "Five years from now, I think people will be surprised that although we've scaled tremendously over the last three or four years, that's really the beginning of the story."
