Credo in the AI stack

The business and what the filings show

Credo designs the high-speed connections that link servers and switches inside AI clusters: active electrical cables, the SerDes circuits at either end of a link, and optical components. It is a small company that has grown very fast: $1.6B of revenue over its latest four quarters, +165% on the four quarters before, at a 67% gross margin and a 32% operating margin.

Its customers are concentrated even by the standards of this map. Its top ten customers accounted for about 90% of fiscal 2026 revenue, and two customers each passed 10%. Its 10-K describes a market driven largely by hyperscalers and the emerging “neoclouds”, and names Oracle as a partner in developing its optical products.

Credo shows how much value can sit in a part of the stack most investors never see. Every new generation of accelerators needs faster links, and the cables and chips that carry them are a small share of a cluster’s cost but essential to it working at all. The risk is the mirror image: a design win at one hyperscaler can double revenue, and a lost one can halve it.

How AI shows up in the numbers

Almost all of Credo’s growth is AI. Its products connect accelerators to each other and to switches within AI clusters, where each new generation of hardware needs faster and more reliable links. Its 10-K says AI has created a new generation of data centers that depend much more on high-speed connections, and warns that the market will depend on the success of generative AI technologies.

For scale, Credo’s revenue over the latest four quarters equals 0% of the $566B the five largest buyers spent on capital projects over their latest four quarters. Their capex rose +81% on the year before, while Credo’s revenue grew +165%: faster than the spending, a sign it is capturing a growing share of each capex dollar or selling to buyers beyond the five.

How it talks about AI

Credo is not yet in the set of companies whose earnings releases we read sentence by sentence, so this section quotes its annual report on Form 10-K instead. Statements in a 10-K carry more weight than a press release or an earnings call: they are part of a filing the company signs and can be held to, and the risk factors in particular say what management believes could go wrong. The sentences below are quoted from its latest 10-K.

Read them for two things: how directly the company ties its growth to AI, and how much it is willing to quantify. A company that names AI as its main growth driver is making a claim its revenue mix can be checked against in the next filing; one that says AI’s effect is hard to measure is telling you its numbers won’t isolate it.

The figure to set these statements against is Credo’s own growth: revenue +165% over its latest four quarters at a 67% gross margin. If AI is driving the business as described, the next filings should show it in the mix of revenue by product or customer, and in margins that hold up as volumes grow.

• On AI data centers: “Artificial Intelligence (AI) has bred a new generation of data centers over the past 5 years that depend much more heavily on high speed, reliable communications for Front End, Scale Out, Scale Up and emerging Scale In Networks.” 10-K, June 15, 2026
• On its market: “The multibillion-dollar data infrastructure market that we serve is driven largely by hyperscale data centers (hyperscalers) and emerging NeoClouds building AI/Machine Learning (ML) Infrastructure as well as general compute and data centers.” 10-K, June 15, 2026
• On its risks: “The general compute and Artificial Intelligence and Machine Learning (AI/ML) infrastructure market is an emerging market that will depend on the success of generative AI technologies, and this market may not develop as we currently expect, including due to regulatory uncertainty.” 10-K, June 15, 2026

The trend in the numbers

Since the start of 2023, Credo’s largest quarter by revenue was Q2 2026 at $479M, and its highest gross margin was 69% in Q4 2025. The latest quarter set the revenue record for the period.

Quarter by quarter, Credo’s revenue grew +272% in Q3 2025, +201% in Q4 2025, +157% in Q1 2026, +115% in Q2 2026 on the same quarter a year earlier. Growth has been slowing, though from a high base.

Gross margin in the latest quarter was 65%, against 67% a year earlier, so more of each new dollar is passing through to costs. Operating margin moved from 27% to 25% over the same span. Over the latest four quarters it turned 31% of its revenue into operating cash flow and spent 4% of revenue on capital projects, against 6% a year earlier.

Where it sits in the stack

Credo sits in the networking and optics layer of the AI stack. It is paid by the AI clouds and servers layers; its own spending flows to chips, foundry & tools.

Among the 10 companies in this layer on our map, it ranks number 8 by revenue and first of 10 by revenue growth. Its gross margin of 67% compares with 53% for the layer as a whole, a sign that it keeps more of each dollar than its neighbors. The full layer analysis is on the networking page.

Latest four quarters for 10-Q filers; latest fiscal year for 20-F filers. Companies under $100 million of revenue are left out.

Against the 10 US-listed companies in its layer, Credo grew +165% over the latest year versus +25% for the layer combined, and converted 28% of revenue into free cash flow versus 19% for the layer. It is taking share of the layer’s revenue.

What has to go right, and what could go wrong

What has to go right. Copper connections have to stay competitive at each new link speed, and Credo has to keep winning designs at several large buyers so its growth doesn’t rest on one or two.

What could go wrong. With about 90% of revenue from ten customers, losing a single design could reverse its growth, and larger chip companies could bring competing products to its market.

These describe the conditions the business depends on, as the filings show them. They are not a view on the stock.

Through the lens of Investing in AI

Rob May’s book offers six mental models for telling AI moats from traps. The one most useful for Credo’s layer is “AI is a collection of technologies”: Neural nets, Bayesian methods, symbolic systems, and evolutionary algorithms have different cost structures, moats, and risks. Treating AI as one bucket hides the differences that matter. Invest in defensibility, not in a single paradigm.

The question it asks of any company is: What kind of AI is this, and how hard is it to replicate? Applied to Credo, the filings on this page are the place to start: the margin trend shows whether it holds scarce value or passes it through, the customer and financing disclosures show who it depends on, and the commitments show what it has promised before the revenue arrives.

Customers and concentration

US companies must disclose any customer that accounts for 10% or more of revenue, and foreign filers usually describe their largest customers. Concentration matters because a company’s growth is only as durable as the handful of buyers behind it, and in the AI stack those buyers are often the same few companies.

• “In addition, in fiscal 2026, sales to our top 10 customers accounted for approximately 90% of our total revenue.” 10-K, June 15, 2026

Commitments and backlog

• Backlog. Credo doesn’t report a comparable total of remaining performance obligations in its XBRL data.

What to watch

Credo’s next quarterly report will cover the quarter ending around October 31, 2026. Large companies must file a 10-Q within 40 days of a quarter’s end and a 10-K within 60 days of the fiscal year’s end, so the new figures should arrive by about December 30, 2026 at the latest. This page, the layer pages and the next quarterly report all update from that filing.

• Revenue from its largest customers, since two account for more than 10% each and the top ten for about 90%.
• Gross margin as volumes grow and competitors enter active electrical cables.
• Each new accelerator and switch generation: link speeds rising from 800G to 1.6T are where design wins are won and lost.
• Its place in the next quarterly AI Stack Report, which updates every company on the map from the new filings.

Figures from Credo’s SEC filings, latest period ended August 1, 2026. Other companies: all company pages.