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Investing.com - Stifel has reiterated its Buy rating and $160.00 price target on Credo Technology Group Holding Ltd. (NASDAQ:CRDO) following the company’s new product announcement. The semiconductor company, currently valued at $25.93 billion, has demonstrated impressive performance with a 176% revenue growth over the last twelve months and maintains strong gross profit margins of 66%.
Credo Technology announced its ZeroFlap (ZF) optical transceiver product line on October 13, 2025, supporting network speeds of 400G, 800G, and 1.6T. This product line extends the company’s ZF reliability architecture from Active Electrical Cables (AECs) to optical transceivers through system-level DSP innovations. According to InvestingPro data, analysts expect the company’s strong momentum to continue with 120% revenue growth forecast for fiscal year 2026.
The new offering positions Credo to address reliability challenges that have been present in laser-based optical connectivity in AI clusters. According to the company, link flap failures in these environments can cause $30,000 to $50,000 per incident in cluster downtime. Want deeper insights? InvestingPro subscribers have access to over 20 additional key metrics and analysis tools, including detailed valuation models and comprehensive financial health scores.
Credo’s ZF capabilities have already been proven with its AEC technology, which has delivered up to 1,000x better reliability through billions of hours of field operation without link flaps. The company aims to achieve similar reliability improvements for laser-based optical transceivers.
The announcement also highlighted Credo’s PILOT software platform, which integrates predictive signal integrity, link optimization, and telemetry across the entire connectivity solution stack to detect and resolve degradation before it impacts workloads.
In other recent news, Credo Technology Group Holding Ltd has completed its acquisition of Hyperlume, Inc., a developer of microLED-based optical interconnect technology for chip-to-chip communication. The acquisition, estimated to cost between $40-50 million and funded through a combination of shares and cash, is expected to enhance Credo’s portfolio in high-speed connectivity solutions, particularly for AI-driven data infrastructure. Following this acquisition, Stifel raised its price target for Credo Technology to $160, maintaining a Buy rating, and highlighted the accelerating revenue momentum of Credo’s Active Electrical Cable (AEC) business.
Additionally, William Blair initiated coverage on Credo Technology with an Outperform rating, noting the company’s expanding product portfolio. The research firm pointed out that while the Ethernet AEC business is projected to account for about 88% of sales in fiscal 2026, Credo is also advancing into optics with its Dove and Lark DSP chips. In another development, Credo unveiled its new Bluebird Digital Signal Processor (DSP) for 1.6Tbps optical transceivers. This DSP aims to reduce power consumption to below 20W, addressing existing challenges in power usage and potentially easing deployment constraints.
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