Credo's Optical DSP Business Anticipates Strong Growth & Revenue Momentum in Fiscal 2026

Credo Technology Group Holding Ltd's optical DSP business experienced strong revenue growth in fiscal 2025, driven by a significant DSP design win for an 800G transceiver. The company introduced ultra-low-power 100 gig per lane optical DSPs and a 3-nanometer 200 gig per lane DSP at the OFC Conference. Credo anticipates continued demand in the optical connectivity market and expects expanding revenue growth in the long run, with the optical business expected to witness growth of 2x or more in fiscal 2026.

Credo Technology Group Holding Ltd's (CRDO) optical digital signal processor (DSP) business experienced robust revenue growth in fiscal 2025, driven by a significant DSP design win for an 800G transceiver. At the Optical Fiber Conference (OFC), the company introduced ultra-low-power 100 gig per lane optical DSPs and a 3-nanometer 200 gig per lane DSP, further solidifying its position in the market [1][2].

Fiscal 2025 was marked by solid revenue growth and broader customer adoption for Credo's optical business. The company anticipates continued demand in the rapidly growing optical connectivity market, where reliability and energy efficiency are becoming increasingly important. Credo is well-positioned to deliver system-level innovations that provide significant advantages for its partners. The optical business is expected to witness growth of 2x or more in fiscal 2026, with strong momentum in 100 gig per lane solutions and preparation for the 200 gig per lane market. Management expects fiscal 2026 total revenues to exceed $800 million, driven by accelerating adoption of high-speed connectivity solutions in AI-focused data centers, continued innovation across AEC, optical and retimer product lines, and an expanding, diversified customer base [1][2].

Credo's competitors in the semiconductor industry are also experiencing strong growth. Marvell Technology, Inc. (MRVL) reported record first-quarter revenues of $1.895 billion, up 63% year over year, with strong growth expected to continue in the second quarter. The momentum is driven by surging AI demand in data centers, supported by scaling custom silicon programs and robust electro-optics shipments. Broadcom (AVGO) is committed to technology leadership, delivering category-leading solutions across both semiconductors and infrastructure software. Driven by strong demand for its AI semiconductor solutions and VMware, AVGO reported second-quarter fiscal 2025 revenues of $15 billion, up 20% year over year [1][2].

Shares of CRDO gained 78.6% year to date compared with the Electronics-Semiconductors industry’s growth of 16.4%. In terms of the forward 12-month price/sales ratio, CRDO is trading at 23.73, higher than the Electronic-Semiconductors sector’s multiple of 8.79. The Zacks Consensus Estimate for CRDO earnings for fiscal 2026 has been unchanged over the past 60 days [1][2].

References:
[1] https://www.nasdaq.com/articles/credos-optical-dsp-business-set-spur-growth-revenue-momentum
[2] https://www.barchart.com/story/news/34425264/is-credo-s-optical-dsp-business-set-to-spur-growth-revenue-momentum