SAN JOSE, Calif. - Credo Technology Group Holding Ltd (NASDAQ:CRDO), a provider of high-speed connectivity solutions, has announced the launch of its 800G ZeroFlap (ZF) family of HiWire Active Electrical Cables (AECs). These cables, extending up to 7 meters, are designed to support artificial intelligence (AI) backend networks with enhanced reliability and signal integrity.
The new HiWire ZF AECs aim to eliminate soft link flaps—a common problem in large GPU clusters that can cause significant training time losses and financial costs. According to Alan Weckel, Founding Analyst at the 650 Group, each link flap event can result in up to 30 minutes of lost training time and cost up to $200,000.
Credo's cables leverage recent advances in liquid cooling technology to facilitate full host-to-switch connectivity in leading GPU clusters. Their deployment is expected to improve cluster reliability, which is critical for the operation of supercomputers with extensive GPU arrays.
The HiWire ZF product family includes four new offerings: 800G OSFP to OSFP, 800G OSFP to OSFP-RHS, 800G OSFP to 2OSFP-RHS, and 800G OSFP to 2Q112. These products are part of Credo’s strategy to address the growing demand for higher bandwidth and energy efficiency in data infrastructure.
Ameet Suri, Head of AEC Product at Credo, highlighted the cables' benefits, noting power savings of up to 14W per link and cost savings of up to $1,000 per GPU compared to legacy optics. Massine Merzouk, Network Engineer at X assisting xAI, emphasized the importance of Credo's HiWire AECs in building massive supercomputer systems.
Credo will showcase the new HiWire ZF AEC cables at the Open Compute Project 2024 Summit (OCP) in San Jose from October 15-17, 2024. Attendees are invited to visit Credo's booth to learn more about the products.
This announcement is based on a press release statement from Credo Technology Group Holding Ltd.
In other recent news, Credo Technology Group Holding Ltd. reported robust Q1 2025 results, with revenues reaching $59.7 million and a non-GAAP gross margin of 62.9%, marking a substantial year-over-year revenue increase of 70%. This strong performance was primarily driven by expanding AI deployments. Analysts at TD Cowen, Craig-Hallum, and Needham have all maintained a Buy rating for Credo Technology, with TD Cowen setting a price target of $40, Craig-Hallum raising the price target to $38, and Needham upping it to $33.
These firms have expressed optimism about the company's potential for diversified revenue streams, as evidenced by broadening engagement across its product portfolio, including Application-Specific Integrated Circuits (ASICs) and Optical Digital Signal Processors (DSPs). They anticipate a revenue inflection in the second half of fiscal year 2025, driven by accelerating ASIC revenue from multiple hyperscaler customers.
In addition, Credo Technology plans to enter the 64 gig PAM4 PCIe Gen 6 market later this year, aiming to capitalize on the growing demand for higher bandwidth driven by AI applications. The company's gross margins have shown a strong quarter-over-quarter increase, and shipments of Optical Digital Signal Processors are projected to be robust in fiscal year 2025. These developments highlight recent advancements in Credo Technology's operations and market strategy.
InvestingPro Insights
Credo Technology Group Holding Ltd's (NASDAQ:CRDO) launch of its 800G ZeroFlap family of HiWire Active Electrical Cables aligns well with the company's strong market position and growth trajectory. According to InvestingPro data, Credo has demonstrated impressive revenue growth, with a 70.15% increase in quarterly revenue as of Q1 2025. This robust growth is likely fueled by innovative products like the newly announced HiWire ZF AECs, which address critical needs in AI infrastructure.
The company's focus on high-performance connectivity solutions for AI backend networks is reflected in its financial metrics. Credo boasts a gross profit margin of 62.47% for the last twelve months, indicating efficient production and strong pricing power in the competitive tech hardware market. This aligns with an InvestingPro Tip highlighting Credo's "impressive gross profit margins."
Investors have taken notice of Credo's potential, as evidenced by the stock's strong performance. InvestingPro data shows a remarkable 117.23% price total return over the past year, and the stock is currently trading near its 52-week high. This market enthusiasm suggests confidence in Credo's strategic direction and product offerings like the new HiWire ZF AECs.
It's worth noting that while Credo is not currently profitable, analysts expect this to change. An InvestingPro Tip indicates that "analysts predict the company will be profitable this year," which could be a pivotal development for the company as it continues to innovate in the high-speed connectivity space.
For investors seeking a deeper understanding of Credo's potential, InvestingPro offers 17 additional tips, providing a comprehensive view of the company's financial health and market position.
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