NEW YORK, March 5, 2026, 15:00 EST
Shares of Credo Technology Group Holding climbed roughly 9% in mid-afternoon U.S. trading Thursday, as Broadcom’s recent remarks on AI data-center wiring gave a boost to copper-connected stocks. At 2:44 p.m. EST, MarketScreener showed Credo at $111.94, up 9.17%.
This move recouped some of Tuesday’s drop after earnings. Credo closed March 3 at $97.30, a 14.8% decline, with investors focusing on weaker gross-margin guidance for the ongoing quarter—even though revenue and profit topped expectations.
There’s a battle underway over how to connect AI chips in server racks. Broadcom is throwing its support behind direct-attach copper for those fast, short-run “scale-up” links, arguing it outperforms on latency, energy efficiency, and cost. On the other hand, co-packaged optics, or CPO, shifts those optical links right up to the chips—still seen as a longer-term play. Seeking Alpha
This is notable now with AI investment showing no signs of slowing. Broadcom on Thursday forecast over $100 billion in AI chip sales next year. Alphabet, Microsoft, Amazon, and Meta? Their combined outlay on AI infrastructure could top $600 billion in 2026.
Credo reported a 201.5% surge in fiscal third-quarter revenue to $407 million on Monday. Non-GAAP diluted EPS climbed to $1.07. Looking ahead, the company is projecting revenue between $425 million and $435 million for the current quarter.
Chief Executive Bill Brennan described the stretch as “record results,” crediting further gains in AECs—active electrical cables equipped with chips to preserve high-speed signals—and integrated circuits for powering the quarter. He flagged momentum picking up in ZeroFlap optics, active linear cables, and OmniConnect as well. Credo Technology Group
During the earnings call, Chief Financial Officer Daniel Fleming pointed out that Credo’s three largest customers posted sequential growth compared to the previous quarter. He also maintained that “where you can use copper, you will use copper,” citing its reliability, power efficiency, and total cost of ownership. Investing.com
Credo is making a push to broaden its footprint. The company announced it has acquired CoMira Solutions, picking up link-layer, error-correction, and security IP—key semiconductor components for moving data accurately and securely within and across AI racks.
It’s not all moving in one direction. Nvidia this week disclosed plans to put $2 billion apiece into optical players Lumentum and Coherent, betting big on photonics for AI data centers. Light-based networking, in other words, is very much still on the table.
Risks are clearly present. According to a filing, three major end customers made up 39%, 32%, and 17% of Credo’s quarterly revenue—so any pause in spending, design changes, or cluster build delays from a big cloud name could hit hard. For the current quarter, the company is guiding for a non-GAAP gross margin in the 64% to 66% range, another number to keep an eye on.
On Thursday, William Blair’s Sebastian Naji said Broadcom’s remarks were “generally aligned” with his own thinking: CPO adoption, he figures, remains “2-3 years away from seeing a meaningful inflection.” That gives Credo a bit of breathing room, but the debate’s far from over. barrons.com
