Can Credo’s $750 Million Optics Bet Turn Copper’s Limits Into Your Portfolio Gains?

2 hours ago 2

Rich Duprey

Mon, April 20, 2026 astatine 11:47 AM CDT 5 min read

Credo Technology Group (CRDO) posted Q3 fiscal 2026 gross of $407 million, up 201.5% twelvemonth implicit year, driven by hyperscaler request for its Active Electrical Cables that widen copper scope portion cutting powerfulness depletion successful half. The institution is acquiring DustPhotonics for $750 cardinal successful currency and banal to physique a vertically integrated stack combining SerDes chips with silicon photonics, positioning optical gross to transcend $500 cardinal successful fiscal 2027.
AI information centers look a copper capableness partition arsenic clusters turn to hundreds of thousands of GPUs, pushing Credo to displacement from short-reach copper interconnects to optical solutions that present higher bandwidth with little vigor usage and little vigor generation.
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AI information centers present devour astir 27 tons of copper per megawatt for powerfulness delivery, cooling, and interconnects. The U.S. added astir 11,300 megawatts of information halfway capableness past twelvemonth alone. That surge helped make a projected planetary copper shortage of 320,000 tons successful 2026.

Copper prices climbed, lifting shares of miners specified arsenic Freeport-McMoRan (NYSE:FCX). Yet the precise velocity AI demands exposes copper’s limits. Electrical absorption caps reach, drives up powerfulness use, and generates vigor that information centers tin nary longer spend astatine scale. Optical photonics -- transmitting information arsenic airy -- sidesteps those constraints. It delivers higher bandwidth implicit longer distances with little vigor and little heat. That displacement opens a multi-billion-dollar model for companies that tin present some copper and optical solutions.

Let’s look astatine the numbers. Short-reach copper interconnects inactive predominate wrong AI racks due to the fact that they are inexpensive and reliable today. But arsenic clusters turn to hundreds of thousands of GPUs, the physics nary longer work. Copper cables suffer awesome integrity beyond a fewer meters astatine 800G and 1.6T speeds. Power depletion per spot rises sharply. Cooling demands explode.

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According to S&P Global’s January investigation of copper usage successful information centers, substitution options stay minimal successful dense server environments -- aluminum cables simply instrumentality up excessively overmuch abstraction and behaviour vigor poorly. Investors who rode the copper question via copper miners saw gains from the metal-price spike, but the semipermanent hole lies successful light, not much metal.

Credo Technology Group (NASDAQ:CRDO) started by solving the contiguous problem. The institution designs high-speed SerDes chips and Active Electrical Cables (AECs) that widen reliable copper scope wrong AI clusters portion cutting powerfulness astir successful fractional compared with passive alternatives. Demand exploded.

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