The firm sees Credo\u2019s total addressable market swelling above $10 billion as agentic AI drives backend and frontend network builds across hyperscalers and neoclouds.<\/p>\n
BNP Paribas underscores that Credo\u2019s push into optics is additive, not a signal that short\u2011reach copper is fading.\u00a0<\/p>\n
The company still expects roughly half of its roughly 80% year\u2011over\u2011year fiscal 2027 growth to come from Active Electrical Cables, implying about 47% growth to approximately $1.8 billion of AEC revenue.\u00a0<\/p>\n
Credo argues its SerDes-plus system\u2011level approach yields tighter integration, better reliability, and latency of roughly 6 ns versus peers at around 10 ns, which could matter as AI clusters become more scale\u2011out and latency-sensitive.<\/p>\n
Optics <\/p>\n
Optics is the other major leg of the story. BNP Paribas expects more than $600 million of fiscal 2027 revenue from ZeroFlap (ZF) optical transceivers, optical DSPs and DustPhotonics Ltd photonic integrated circuits, approaching a 25% mix and offering margin accretion versus the corporate average.\u00a0<\/p>\n
Credo plans to ship hundreds of thousands of ZF transceiver units per month by late fiscal 2027, with a two to three-times volume ramp over the subsequent years as it broadens beyond its initial two hyperscalers and two neoclouds.\u00a0<\/p>\n
The DustPhotonics acquisition is central to Credo\u2019s optical differentiation. DustPhotonics\u2019 PICs use proprietary Low Loss Laser Coupling technology to cut laser count by about 75%, from eight lasers to two.\u00a0<\/p>\n
Branching Out<\/p>\n
Customer concentration risk appears to be easing with BNP Paribas expecting Credo to have three to four 10% hyperscale customers in fiscal 2027.\u00a0<\/p>\n
Evercore ISI initiated coverage on CRDO Monday with an Outperform rating and a $325 price target. The analysts highlighted Credo\u2019s systems approach\u2014design, manufacturing, and end\u2011to\u2011end testing\u2014as a key competitive advantage versus traditional optical module vendors.\u00a0<\/p>\n
The firm expects Credo\u2019s optical revenue alone to reach more than $600 million by 2028, supported by investments in optical DSPs and differentiated module architectures.\u00a0<\/p>\n
The Takeaway<\/p>\n
Taken together, both firms view Credo as evolving from a pure\u2011play AEC vendor into a dual copper\u2011and\u2011optical AI connectivity platform with hyperscaler\u2011grade scale, expanding TAM and a roadmap tied directly to the next wave of agentic AI infrastructure build\u2011outs.<\/p>\n