Credo answers Nvidia and Cisco with a rival AI cable spec, and loses 7.2% on the day
Hours after Nvidia and Cisco unveiled the USFP pluggable with connector makers TE Connectivity and Amphenol, Credo launched a rival optics specification and a 1.6T light cable. The stock still fell 7.2% on the day: the cable ships in 2027, two banks cut their targets, and insiders have sold $447 million in a year.
Vincent Jiang · 3 min read
Two camps claimed the same connector on the same day
On October 12, at the Open Compute Project (OCP) summit in San Jose, Cisco−0.70% — Cisco, down 0.70 percent today and Nvidia−0.25% — Nvidia, down 0.25 percent today announced design plans for the Ultra-Dense Small Form-Factor Pluggable (USFP), the first pluggable optics form factor capable of 400 gigabits per lane, with 16 lanes and a path to 12.8 terabits 1. The connector makers TE Connectivity (NYSE: TEL) and Amphenol (NYSE: APH) built it alongside them 2.
Hours later Credo−5.91% — Credo, down 5.91 percent today (NASDAQ: CRDO) opened the rival front: a Short-Reach Micro-Emitter Optics (SRMO) workstream under OCP, the body where hyperscalers publish their rack designs. Seven optical and cable component makers, AFL, ams OSRAM, BizLink, Foxlink, Heraeus Covantics, SENKO and YOFC, joined alongside an unnamed leading hyperscaler, with a specification targeted for OCP approval in 2027 3.
The prize is the connector footprint written into those rack designs, because volume follows the specification: an open spec, as TrendForce notes of the USFP camp, cuts reliance on parts controlled by a few vendors and widens who can sell in 4. The listed names are the trade: CRDO against TEL and APH.
The cable runs slow and wide
The product behind the workstream is Credo's 1.6T ZeroFlap active light cable 5: many micro-emitters running slow in parallel instead of a few lanes pushed fast. It draws 12 watts per cable end, about 30% less than comparable active electrical cables, at a tenth of the weight and 50 meters of reach, against a 100-million-hour reliability target, and it ships in 2027 5.
The bet needs an ecosystem around it. Clusters scaling from thousands to tens of thousands of accelerators require "not a patchwork of components that do not fit together or interoperate," says L.K. Bhupathi, Credo's associate vice president of product 3.
The market sold the answer
CRDO fell 7.2% to $200.84, about 35% below its 52-week high of $308.67 6. Stifel and Mizuho cut their price targets on the day and kept bullish ratings 7; Stifel's remains the street high at $350 10.
The stock sits 35% below its high, and the street high is $350
Data
| CRDO | |
|---|---|
| Price after the fall | $200.84 |
| 52-week high | $308.67 |
| Stifel target (street high) | $350 |
Insiders sold $447.1 million of stock over twelve months with no purchases 6, among them chief technology officer Chi Fung Cheng, whose 27,500 shares went for $5.3 million on September 29 8. The company says the recent sales ran through pre-arranged 10b5-1 plans tied to tax on vested equity 7. They land on a business whose quarterly revenue climbed from $44 million to $479 million in three years 9.
Quarterly revenue has grown almost elevenfold in three years
Data
| Quarterly revenue | |
|---|---|
| Q3 '23 | $44.04M |
| Q4 '23 | $53.06M |
| Q1 '24 | $60.78M |
| Q2 '24 | $59.71M |
| Q3 '24 | $72.03M |
| Q4 '24 | $135M |
| Q1 '25 | $170.03M |
| Q2 '25 | $223.07M |
| Q3 '25 | $268.03M |
| Q4 '25 | $407.01M |
| Q1 '26 | $437M |
| Q2 '26 | $479M |
What decides it
Credo guided the current quarter to $525 million to $535 million 10. The SRMO specification faces its OCP vote in 2027, the same year the cable ships 35. The unnamed hyperscaler in the workstream is the tell: name it, and Credo's coalition has a committed buyer.
The other side of the book is concentration: two customers carry 61% of revenue, a third of sales in the largest 10, and a lost vote would land there first. The dates break one way: Credo has put 2027 on both its cable and its spec 35, while Cisco and Nvidia have announced design plans and no ship date 1.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
