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Credo Technology (CRDO +13%) is surging today after posting its strongest quarter ever. Q2 (Oct) revenue jumped 272% yr/yr and 20% qtr/qtr to $268 mln, well above expectations, and Q3 (Jan) guidance of $335-345 mln far exceeded analyst estimates.

• The company is benefiting from the rapid expansion of AI clusters, now built with hundreds of thousands of GPUs and soon millions, which increases demand for high-reliability interconnect gear.
• Active Electrical Cables (AECs) remain the fastest-growing segment, with four hyperscalers each contributing 10%+ of Q2 revenue and a fifth joining early.
• AECs are becoming the standard for intra-rack links, offering 1,000× better reliability and ~50% lower power vs. optical modules.
• The IC segment (retimers, optical DSPs) is set for growth as data rates shift to 50G/100G and later 200G per lane.
• Credo also expanded its TAM with new growth pillars, led by ZeroFlap Optics, currently in trials with major U.S. hyperscalers and expected to generate initial revenue in FY27.

Briefing.com Analyst Insight:

Credo delivered an exceptional quarter, with both Q2 performance and Q3 guidance signaling accelerating momentum tied to AI infrastructure spending. While the company is not typically viewed as a front-line AI beneficiary, its interconnect offerings are becoming increasingly critical as GPU clusters scale in size and complexity. The AEC segment, in particular, is seeing strong hyperscaler adoption and displacing traditional optical modules. That said, the stock's rapid ascent reflects how tightly it is now linked to AI capex cycles, which can be volatile. Still, with expanding product lines, increasing customer breadth, and new optical technologies on the horizon, Credo stands out as an under-the-radar, high-leverage play on the growth of AI data centers.