Where Will Credo Technology Be in 3 Years?

Here in Florida, dollar weeds can overrun a lawn in a single rainy month. Credo Technology Group Holding (NASDAQ: CRDO) has been growing at a similar clip in the data center networking space. Revenue more than tripled in fiscal 2026, and management expects another jump of more than 85% this year.

That's what happens when you sell picks and shovels in the biggest gold rush in tech. Actually, scratch that metaphor: Credo sells the extension cords.

Nvidia and its AI accelerators get the market-moving glory, but somebody has to wire tens of thousands of GPUs together and keep those connections from glitching. That's Credo's job. Its active electrical cables (AECs) handle short hops inside server racks, and a growing optical lineup covers longer distances.

Three years from now, Credo's position will hinge on two factors: the pace of AI infrastructure spending and the success of a crowded product pipeline.

A check-engine light for AI clusters

Credo's real specialty is reliability. AI clusters suffer from "link flaps," which are network connections that blink off and on without fully failing. A single flap can force operators to reset an entire cluster, losing hours of valuable computing work. In last month's Q1 2027 earnings call, Credo CEO Bill Brennan said that some customers have lost 10% to 20% of their GPU utilization to this problem.

So Credo adds smart software to its high-performance hardware. The PILOT platform monitors every link in real time. Brennan compares it to adding a yellow check-engine light to networks that used to show only green or red. One customer cut the computing cluster bring-up time from approximately seven weeks to five days. When a month of idle AI hardware can cost hundreds of millions of dollars in lost revenue, that kind of speed sells itself.

Three years of new toys

Today, Credo is mostly a copper-cable company with a fast-growing optical side business. By fiscal 2028, it plans to add microLED cables that reach 30 meters, gearbox chips that help AI processors tap more memory, and dense optics for in-rack networks. Brennan describes Credo as "agnostic to the medium." It doesn't care whether your bits travel by copper or by light, as long as they ride on Credo gear.

Meanwhile, the hyperscalers keep shoveling cash into the furnace. Microsoft, Amazon, Alphabet, and Meta Platforms expect to spend about $745 billion on capital expenditures in 2026, up from $413 billion last year. Following that trend, analysts see Credo's revenue climbing from about $1.3 billion in fiscal 2026 to $3.9 billion in fiscal 2028.

What could go wrong

Customer concentration is the largest risk. The two biggest customers accounted for 61% of first-quarter revenue. Chip giants Broadcom (NASDAQ: AVGO) and Marvell Technology (NASDAQ: MRVL) compete for many of the same contracts. And co-packaged optics could shrink the pluggable-component market where Credo earns most of its money.

Credo's growth doesn't come cheap, either. Shares trade at 77 times trailing earnings and 25 times sales on Oct. 9. Growth-friendly metrics look kinder: the PEG ratio sits around 0.4, and the stock trades at about 22 times fiscal 2028 earnings estimates.

Image source: The Motley Fool.

The verdict

So where will Credo be in 2029?

Probably a much bigger business, with a broader product menu and a less lopsided customer list. The stock is a separate question. At this price, investors are betting the AI data center boom keeps rolling for years. If it does, Credo should keep spreading like a weed. If it doesn't, the share price could wilt.

Anders Bylund has positions in Alphabet, Amazon, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, Marvell Technology, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.