Latest news with #ActiveElectricalCables
Globe and Mail
13-06-2025
- Business
- Globe and Mail
Credo Expects Revenues to Top $800M in FY26: Is the Growth Sustainable?
Credo Technology Group Holding Ltd CRDO has set an ambitious tone for fiscal 2026, guiding revenues of more than $800 million compared with $437 million reported in fiscal 2025. Fiscal 2025 revenues rose 126% year over year amid exponential data growth and rapid AI proliferation, which is driving demand for faster and energy-efficient connectivity solutions. This bodes well for Credo. One of Credo's key strengths lies in its Active Electrical Cables ('AEC') product line, which posted double-digit sequential growth in the fiscal fourth quarter. The growth is driven by its increasing adoption in the data center market. The demand for AECs is increasing as ZeroFlap AECs offer more than 100 times improved reliability than laser-based optical solutions. Moreover, Credo's system-level approach is giving it a competitive edge. It owns the entire stack of SerDes IP, Retimer ICs, system-level design, qualification and production. This integrated approach allows faster innovation cycles and strong cost efficiency. With demonstration of PCIe Gen6 AECs and increasing hyperscaler interest, this product line is expected to remain a growth engine going ahead. Momentum in the optical business bodes well. CRDO achieved revenue targets for this business in fiscal 2025 and expects expansion of customer diversity across lane rates, port speeds and applications to accelerate revenue growth going ahead. CRDO's PCIe retimers and Ethernet retimers continue to witness customer interest, especially for scale-out networks in AI servers. Credo highlighted that the retimer business delivered 'robust' performance in both the fiscal fourth quarter and fiscal 2025, driven by 50 gig and 100 gig per lane Ethernet solutions. This growing demand underscores the increasing importance of high-performance solutions in the rapidly expanding AI-server market. Shift to 100 gig per lane solutions and higher demand for system-level expertise and software capabilities for dealing with AI-optimized architectures bode well for CRDO's retimer business. That said, increasing market competition and macroeconomic uncertainties may impact CRDO's growth trajectory. Credo competes with semiconductor giants like Broadcom Inc. AVGO and Marvell Technology, Inc. MRVL. Taking a Look at AVGO & MRVL Revenue Guidance Broadcom does not provide guidance for the full year but has provided third-quarter fiscal 2025 view. For third-quarter fiscal 2025, Broadcom expects revenues of $15.8 billion, up 21% year over year. Semiconductor revenues are anticipated to grow 25% year over year to $9.1 billion. AI semiconductor revenues are projected to grow 60% year over year to $5.1 billion, whereas non-AI semiconductor revenues are expected to reach $4 billion. AI revenues are benefiting from investments from hyperscale partners in AI XPUs and connectivity solutions for AI data centers. Infrastructure Software revenues are expected to grow 16% year over year to $6.7 billion. Marvell Technology expects revenues to be $2 billion (+/- 5%) for the second quarter of fiscal 2026, indicating growth of 57% year over year. The growth is likely to be driven by demand for AI-driven custom silicon, which has become the biggest component of Marvell Technology's data-center revenues. It expects data-center revenues to increase in the mid-single-digit range sequentially and maintain strong year-over-year growth. MRVL delivered approximately $1.9 billion in revenues for the first quarter of fiscal 2026, up 63% year over year, while data center end-market revenues of $1.44 billion rose 76% year over year. CRDO Price Performance, Valuation and Estimates Shares of CRDO gained 6.5% year to date compared with the Electronics-Semiconductors industry's growth of 6.8%. Image Source: Zacks Investment Research In terms of the forward 12-month price/sales ratio, CRDO is trading at 15.16, higher than the Electronic-Semiconductors sector's multiple of 8.21. Image Source: Zacks Investment Research The Zacks Consensus Estimate for CRDO earnings for fiscal 2026 has seen a significant upward revision over the past 60 days. CRDO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Credo Technology Group Holding Ltd. (CRDO): Free Stock Analysis Report This article originally published on Zacks Investment Research (
Yahoo
03-06-2025
- Business
- Yahoo
CRDO Tanks 33% in 3 Months: Should You Hold the Stock or Make an Exit?
Credo Technology Group Holding Ltd CRDO stock has slipped 33.3% over the past three months, significantly more than the Electronic-Semiconductors industry's decline of 16.4%. The broader Computer and Technology sector and S&P 500 Composite have registered declines of 11.5% and 7.8%, respectively, over the same time frame. The markets since April have been affected by evolving U.S. trade policy and diminishing macroeconomic visibility. Image Source: Zacks Investment Research CRDO gained 6.1% yesterday and closed trading at $51.39, but the stock is down 41% below its 52-week high of $86.69. This is likely to spook investors as they contemplate how to strategize their investment now. The natural question is: Should you stay invested or exit now? Let's weigh the pros and cons of this AI stock and see whether it is worth staying invested or not. Credo is a provider of high-performance serial connectivity solutions for the data infrastructure market. Amid exponential data growth and rapid AI proliferation, market demand for faster and energy-efficient connectivity solutions continues to increase. This bodes well for Credo. One of Credo's key strengths lies in its Active Electrical Cables (AEC) product line, which posted triple-digit sequential growth in the third quarter of fiscal 2025. The growth is driven by its increasing adoption in the data center market. The demand for AECs is increasing as ZeroFlap AECs offer more than 100 times improved reliability than laser-based optical solutions. This made AECs an increasingly attractive option for data center applications, contributing to the new expansion of AEC usage and further solidifying Credo Technology's position in the market. Image Source: Zacks Investment Research Credo is also focused on expanding its product portfolio to include a portfolio of PCIe solutions, which will address the growing demand for AI scale-out and scale-up networks. The company expects the PCIe products to considerably expand its total addressable market. This expansion into PCIe connectivity further solidifies the company's competitive positioning in the high-performance computing and AI markets. Momentum in the optical business, particularly for Optical Digital Signal Processors (DSPs), bodes well. In April 2025, CRDO unveiled the innovative Lark Optical DSP family, engineered to transform 800G optical transceivers. The Lark portfolio has two distinct optical DSP products. The Lark 800 is a high-performance, low-power DSP optimized for fully retimed 800G transceivers, designed to meet the stringent power and cooling requirements of hyperscale AI data centers. The Lark 850 is an ultra-low-power 800G Linear Receive Optics DSP, consuming under 10W, making it an ideal solution for AI-driven data environments where power efficiency is exceptional. CRDO's PCIe retimers and Ethernet retimers saw strong customer interest, especially for scale-out networks in AI servers. This growing demand underscores the increasing importance of high-performance solutions in the rapidly expanding AI server market. PCIe retimer demand is expected to exceed $1 billion by 2027, positioning Credo Technology for significant future revenue growth. For the fourth quarter of fiscal 2025, CRDO expects revenues between $155 million and $165 million. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $160 million, suggesting growth of 163.2% from the year-ago quarter's reported figure. For the third quarter of fiscal 2025, CRDO reported $135 million in revenues, up 87% sequentially and 154% year over year, beating the Zacks Consensus Estimate by 12.5%. This surge was mainly driven by its largest hyperscale customer, which significantly scaled the production of AI platforms, reflecting the growing demand for AI-powered connectivity solutions. Despite Credo's strong performance and innovative solutions, several challenges pose headwinds to its prospects. CRDO's business is heavily tilted toward AI-related infrastructure and the hyperscale cloud market spending. While these segments are currently experiencing high growth, they are also cyclically dependent on AI capex spending, which could decelerate after initial buildouts. Credo's non-GAAP operating expenses in the fiscal third quarter surged 16% sequentially to $43.8 million, primarily due to higher headcount. Increasing costs could become a problem if the revenue growth does not keep pace. In the last reported quarter, 86% of revenue came from a single end customer. This intense customer concentration risk can impact revenues as the company becomes highly vulnerable to the loss of business from those clients. To diversify its base, CRDO added that it has two additional hyperscalers in qualification and has already achieved volume production with three others. The company expects to ramp up with these two hyperscalers in fiscal 2026. These factors, along with increasing market competition and macroeconomic uncertainties, may impact CRDO's growth trajectory. Credo competes with semiconductor giants like Broadcom Inc. AVGO and Marvell Technology, Inc. MRVL. Analysts also seem wary as reflected in unchanged revisions for earnings estimates in the past 60 days. Image Source: Zacks Investment Research CRDO's 33.3% decline is also much steeper than peers like Broadcom and Cirrus Logic, Inc. CRUS. Broadcom and Cirrus Logic have declined 11.6% and 6.5%, respectively. However, Marvell's stock has declined 48.9% in the same time frame. Credo Technology stock is also not so cheap, as its Value Style Score of F suggests a stretched valuation at this moment. In terms of the forward 12-month Price/Sales ratio, CRDO is trading at 12.92, higher than the Electronic-Semiconductors sector's multiple of 6.97. Image Source: Zacks Investment Research In comparison, Broadcom trades at a forward 12-month P/S multiple of 14.46, while Cirrus Logic and Marvell Technology are trading at a multiple of 2.76 and 5.71, respectively. While Credo appears well-positioned in the AI-driven connectivity space, there are several factors that could exert downward pressure on the stock. Key concerns include customer concentration, competitive pressures, stretched valuation, and overreliance on AI spending. CRDO currently carries a Zacks Rank #3 (Hold), which indicates that investors should wait for a better entry point. However, existing investors can hold the stock as its growth prospects remain intact. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report Credo Technology Group Holding Ltd. (CRDO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-06-2025
- Business
- Yahoo
Bull of the Day: Credo Technology (CRDO)
Credo Technology Group (CRDO) is a key supplier of high-performance serial connectivity solutions for the hyperscale datacenter, 5G carrier, enterprise networking, HPC (high-performance computing), and AI/ML is located in the center of the AI revolution in San Jose, sales growing 120% this fiscal year to $425 million, one of Credo's high demand products is their line of Active Electrical Cables (AEC) which provide high-speed connectivity solutions to data centers and enterprises with heavy AI and cloud computing also makes Digital Signal Processing (DSP) chipsets to facilitate high-bandwidth data transfer with low energy largest and most strategic customers are leading hyper-scalers like Microsoft (MSFT) and Amazon who use Credo's AECs to support AI and cloud its biggest competition comes from Broadcom (AVGO) and Marvell (MRVL) in connectivity solutions for the AI is the AI Market MakerAs I've said for almost eight years, Jensen & Co. have been creating new industries we didn't even know we needed. Once modern data enterprises and research universities caught on to what GPU-CUDA "massively parallel architectures" could do for them, they literally created new uses cases by the thousands per you can simulate anything, use synthetic data to do so, and then run billions of iterations on your experimental idea in a matter of hours, innovation happens much Jensen talks about 1,000-fold advances in science, engineering, and social challenges. And then you understand why NVIDIA (NVDA) power tools are in such demand for the Global 2000 corporations, plus universities, plus nation-states who need to secure and "mine & model" their own my NVIDIA (NVDA) "Top Picks" video on April 21, I compared the new Huawei supercomputer offering to NVIDIA's GB200 one of my points of focus was on the high-speed, low-latency connectivity required for these new rack-scale architectures. I didn't mention Credo, but I'm very curious about how closely they are working together since Jensen likes that "copper is cheaper" and perfectly still useful for direct connections between GPUs in racks.A Fly in the AnointmentThis all sounds great for Credo going forward, especially as they are projected to grow EPS this fiscal year by a whopping 600%!But the stock was richly valued before their Q3 FY2025 (ended April) report. Right now at an $8 billion market cap on forward sales of over $500 million, they are conservatively trading over 16X early March when they reported, CRDO shares had been cut in half from $80 to $40 in just a month just to get back down to earth at 16X sales. So it's safe to say they were trading near 30X sales in Q1 near the stock highs above $ of the big pessimism -- or realism -- even before the trade war tumult, was that Credo's Q3 38% EPS beat and giant 12.5% revenue beat was built around a single large customer who may have contributed as much as 85% of that topline: they didn't disclose Amazon (AMZN) as the big kahuna in their operations, many analysts had sufficient reason to suspect this was the case."As we shared last quarter, we had seven customers that contributed more than 5% of revenue," said Credo Chief Financial Officer Dan Fleming. "And going forward, we expect that three to four customers will be greater than 10% of revenue in the coming quarters and fiscal year, as additional hyperscalers ramp to more significant volumes."I think Credo can keep growing and we won't see another quarter so dependent on one large Makes Credo's AECs More Efficient Than Other Cables?Credo's Active Electrical Cables (AECs) stand out for their efficiency and performance in modern data center environments, especially compared to traditional Direct Attached Copper (DAC) and Active Optical Cables (AOC). Here are the key factors:1. Substantial Power SavingsCredo's AECs consume about 50% less power than traditional DACs and significantly less than AOCs, making them highly energy example, their second-generation HiWire LP SPAN AECs reduce power consumption by nearly half while increasing cable reach by 40% compared to the previous generation.2. Thinner, More Flexible CablesCredo's AECs use thinner copper (as slim as Cat 6 cables), reducing cabling volume by up to 75% compared to passive DACs. This makes them easier to route and manage in dense data center thinner, lighter cables also support longer distances and tighter bend radii, which is critical for modern rack-to-rack and server-to-switch connections.3. Superior Performance and ReliabilityIntegrated digital signal processors (DSPs) and retimers in Credo's AECs deliver better signal integrity, enabling higher data rates (up to 800G and 1.6T) over longer distances without cables offer extreme reliability, with Mean Time Between Failure (MTBF) ratings up to 100 million hours, minimizing downtime and maintenance.4. Plug-and-Play SimplicityCredo's AECs are hot-swappable and easy to deploy, providing a drop-in replacement for AOCs and DACs without the need for additional components or complex also support advanced features like dual Top-of-Rack (TOR) redundancy for enhanced reliability in hyperscale data centers.5. Lower Environmental ImpactBy reducing power consumption and using less plastic and copper, Credo's AECs help customers decrease their environmental Connectivity Innovation for AINow that you know Credo's key "connector" role in the AI economy, let me highlight recent press releases that you should go find on their website if you are interested in learning 18: Credo and XConn to Showcase Seamless GPU Cluster at NVIDIA GTCMarch 26: Credo to Showcase AI Scale Out Fabric Featuring Credo Optical DSPs at OFC 2025March 27: Credo Named a Winner of the 2025 Top Workplaces USA AwardApril 1: Credo Unveils the Lark Family - Setting a New Benchmark for Low-Power 800G Optical DSPsIf their innovation cadence maintains like this, I'm sure their big customer wins will keep growing. If you are really into the AI revolution like I am, watch this video from a Credo engineer that explains the chasm they just jumped last OCP Global Summit 2024 Innovation Village Walk-ThruSheraz Mian and Zacks Top 10 PicksZacks Director of Research Sheraz Mian made CRDO one of his Top 10 Picks for this year. While the stock is off to a rough start for Q1, his description of their business was exceptional so I want to share it for your own due aims to break bandwidth barriers in the data infrastructure market. It provides secure, high-speed connectivity solutions that deliver improved power efficiency as data rates and corresponding bandwidth requirements increase exponentially throughout the data infrastructure Credo's SerDes and DSP chips optimize data transfer by enabling high-speed, error-free communication within data centers, while its HiWire Active Electrical Cables (AECs) provide efficient, high-bandwidth connections between servers to support AI workloads and large-scale data important trends are driving the data infrastructure market, such as cloud workloads, streaming video, 5G wireless deployment, the expansion of Internet of Things (IoT), and, most notably, the growing adoption of artificial intelligence. These trends have all created an explosion of data that has stressed existing infrastructure and forced a major shift.(end of Sheraz Mian observations)The rapid adoption of AI and the need for efficient data center connectivity are driving increased demand for Credo's products among top-tier builders of the AI is expanding its customer base to include all the major technology firms -- from Apple to Tesla -- and multiple large enterprises in energy and education in the line on CRDO: If Sheraz hadn't put Credo on my radar, I might not have studied it enough. Now that I know better, I think its a buy in the $40s. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Credo Technology Group Holding Ltd. (CRDO) : Free Stock Analysis Report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
23-05-2025
- Business
- Yahoo
CRDO Introduces PILOT for Predictive Link Optimization and Telemetry
Credo Technology Group Holding Ltd CRDO recently launched PILOT, its proprietary Predictive Integrity, Link Optimization and Telemetry is Credo's integrated telemetry and diagnostics platform designed to work across its entire portfolio of connectivity solutions, including SerDes IP, retimer ICs and system-level Active Electrical Cables (AECs). With PILOT, network operators gain real-time visibility into link health, predictive diagnostic capabilities and intelligent troubleshooting tools, all within a secure, scalable and user-friendly innovation positions PILOT as a transformative tool in managing high-speed links across demanding environments such as hyperscale data centers, artificial intelligence/ machine learning (AI/ML) compute workloads and enterprise and cloud-scale is currently available for evaluation on Credo's PCIe retimers, with plans to extend support across the entire Credo portfolio, including SerDes IP, retimer ICs and system-level AECs. Initial feedback from early-access customers highlights faster deployment times, improved link consistency in dense environments and simplified telemetry integration with existing platforms. PILOT continuously analyzes essential link quality parameters on a per-lane basis, including received eye quality, signal-to-noise ratio and average and burst error rates. These metrics allow administrators to detect signal degradation before any major disruption, enhancing maintenance capabilities and overall system of PILOT's standout capabilities is its ability to actively maintain link health across SerDes, retimers and AECs. It dramatically reduces intermittent disconnects that can throttle throughput or crash high-load compute collaboration with customer telemetry systems, PILOT's AI models predict potential failures, offering actionable insights that coincide with regular maintenance windows. This predictive insight enables IT teams to plan preemptive interventions during maintenance periods, preventing outages and ensuring continuity. Another key aspect is its rich, intuitive graphical user interface (GUI). Designed for ease of use, the platform allows teams to capture and analyze trace data and adjust performance settings in real-time. Moreover, security and flexibility form the core of PILOT's architecture. It is embedded with features such as optional secure boot, encrypted attestation reports, open APIs for telemetry data integration and support for zero-trust environments. This ensures that telemetry data and link diagnostics are secure, authenticated and compliant with enterprise-grade security standards. Credo continues to focus on faster, more reliable and energy-efficient solutions to power the future of AI, cloud and hyperscale networks. In April 2025, the company introduced its innovative Lark optical Digital Signal Processor (DSP) family, engineered to transform 800G optical transceivers. The Lark portfolio has two distinct optical DSP is also expanding into PCIe solutions to meet the rising demand in AI networks. A strong interest in its PCIe and Ethernet retimers highlights the need for high-performance tech in AI servers. With PCIe retimer demand set to top $1 billion by 2027, Credo is well-positioned for the third quarter of fiscal 2025, CRDO reported $135 million in revenues, up 87% sequentially and 154% year over year, beating the Zacks Consensus Estimate by 12.5%. This surge was mainly driven by its largest hyperscale customer, which significantly scaled the production of AI platforms, reflecting the growing demand for AI-powered connectivity the fourth quarter, CRDO expects revenues between $155 million and $165 million. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $160 million, suggesting growth of 163.2% from the year-ago quarter's reported figure. CRDO currently has a Zacks Rank #3 (Hold). Shares of the company have rallied 210.3% in the past year compared with the Zacks Electronics-Semiconductors industry's growth of 17.3%. Image Source: Zacks Investment Research Some better-ranked stocks from the broader technology space are Juniper Networks, Inc. JNPR, InterDigital, Inc. IDCC and Ubiquiti Inc. UI. JNPR presently sports a Zacks Rank #1(Strong Buy), while IDCC & UI carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators. In the last reported quarter, it delivered an earnings surprise of 4.88%.IDCC is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks. It has a long-term growth expectation of 15%.Ubiquiti's effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques. In the last reported quarter, Ubiquiti delivered an earnings surprise of 33.3%. Its highly flexible global business model remains well-suited to adapt to the changing market dynamics to overcome challenges while maximizing growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Juniper Networks, Inc. (JNPR) : Free Stock Analysis Report InterDigital, Inc. (IDCC) : Free Stock Analysis Report Ubiquiti Inc. (UI) : Free Stock Analysis Report Credo Technology Group Holding Ltd. (CRDO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
CRDO vs. AVGO: Which AI-focused Semiconductor Stock is the Better Buy?
Credo Technology Group Holding Ltd. CRDO and Broadcom Inc. AVGO are semiconductor companies that specialize in high-speed connectivity solutions essential for AI-driven data centers. The data center market is undergoing rapid transformation as organizations accelerate their digital initiatives, including the adoption of hybrid and multi-cloud architectures, along with advanced technologies such as artificial intelligence (AI) and machine learning (ML). This surge in digital activity has resulted in explosive data growth, placing significant pressure on existing data center infrastructure. Consequently, there is a rising need for advanced data processing and storage solutions to support AI workloads. This trend presents strong growth opportunities for companies like Credo and Broadcom. So, now the question arises: Which stock makes a better investment pick at present? Let's dive into the pros and cons for each company. Credo is gaining a strong market presence in both Ethernet and Active Electrical Cables (AECs) solutions specialized for data centers. AEC products experienced triple-digit sequential growth in the third quarter of fiscal 2025, driven by their increasing adoption in the data center market. The demand for AECs is increasing as ZeroFlap AECs offer more than 100 times improved reliability than laser-based optical solutions. This made AECs an increasingly attractive option for data center applications, contributing to the new expansion of AEC usage and further solidifying Credo Technology's position in the market. Credo is also focused on expanding its product portfolio to include PCIe solutions, which will address the growing demand for AI scale-out and scale-up networks. CRDO's PCIe and Ethernet retimers saw strong customer interest, especially for scale-out networks in AI servers. This growing demand underscores the increasing importance of high-performance solutions in the rapidly expanding AI server market. PCIe retimer demand is expected to exceed $1 billion by 2027, positioning Credo for significant future revenue growth. Momentum in the optical business, particularly Optical Digital Signal Processors (DSPs), bodes well. It recently unveiled the innovative Lark Optical DSP family, engineered to transform 800G optical transceivers. The Lark portfolio has two distinct optical DSP products. The Lark 800 is a high-performance, low-power DSP optimized for fully retimed 800G transceivers, designed to meet the stringent power and cooling requirements of hyperscale AI data centers. The Lark 850 is an ultra-low-power 800G Linear Receive Optics DSP, consuming under 10W, making it an ideal solution for AI-driven data environments where power efficiency is exceptional. For the fourth quarter of fiscal 2025, CRDO expects revenues between $155 million and $165 million. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $160 million, suggesting growth of 163.2% from the year-ago quarter's reported figure. Broadcom is a diversified semiconductor company with a strong presence in AI chip development space. AVGO sees massive opportunities in the AI space as its three hyperscaler customers have started to develop their own XPUs. These hyperscalers are significantly ramping up investment in their next-generation frontier models, which do require high-performance accelerators and AI data centers with larger clusters. AVGO noted that by 2027, each of AVGO's three hyperscalers plans to deploy 1 million XPU clusters across a single fabric. Consequently, AVGO's Serviceable Addressable Market for XPUs and networks is expected to be between $60 billion and $90 billion in fiscal 2027 alone. Apart from these three customers, AVGO is also working with four other hyperscalers to aid them in building their own customized AI accelerators. XPUs are necessary to train Generative AI (GenAI) models, and they require complex integration of compute, memory, and I/O capabilities to achieve the necessary performance at lower power consumption and cost. Its next-generation XPUs are in 3 nanometers and will be the first of its kind to market in that process node. AVGO is now planning to tape out the industry's first 2-nanometer AI XPU packaging 3.5D and targets scaling clusters of 500,000 accelerators for hyperscale customers. In the last reported quarter, semiconductor solutions revenues (55% of net revenues) totaled $8.2 billion, rising 11% year over year, driven by strong AI semiconductor revenues. AI-related revenues grew 77% year over year to $4.1 billion, which was a major driver of overall revenue growth. This growth was driven by higher shipments of networking solutions to hyperscalers for AI applications. For second-quarter fiscal 2025, Broadcom expects revenues of $14.9 billion, while AI semiconductor revenues are projected to grow 44% year over year to $4.4 billion. Semiconductor revenues are anticipated to grow 17% year over year to $8.4 billion. Over the past month, CRDO and AVGO have registered gains of 67.8% and 36.3%, respectively. Image Source: Zacks Investment Research In terms of the forward 12-month Price/sales ratio, CRDO is trading at 15.50X, lower than AVGO's 16.05X. Image Source: Zacks Investment Research Analysts have kept their earnings estimates unchanged for CRDO's bottom line in the past 90 days. Image Source: Zacks Investment Research Meanwhile, for AVGO, there is a marginal upward estimate revision. Image Source: Zacks Investment Research Both CRDO and MRVL are well-positioned to gain from the rapidly growing AI driven data center market. CRDO at present flaunts a Zacks Rank #3 (Hold) while Broadcom carries a Zacks Rank #2 (Buy). Consequently, in terms of Zacks Rank, AVGO seems to be a better pick at the moment. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Broadcom Inc. (AVGO) : Free Stock Analysis Report Credo Technology Group Holding Ltd. (CRDO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
