$Credo Technology Group Holding Ltd(CRDO)$ Up 25% since earnings.
Confidence remains high on a re-rating as the CPO TAM expands.
The DustPhotonics acquisition brings SiPho in-house, giving vertical integration across SerDes IP, DSP, SiPho PIC, system integration, and telemetry.
TAM expansion hits transceivers, LPO, and future CPO.
Credo's reliability (ZeroFlap, PILOT telemetry) gives extra confidence that CPO execution will work even with larger failure domains.
They're insulated from the EML laser shortages that $Lumentum(LITE)$ faces — CW lasers on integrated PICs cut laser count, thermal load, and BOM costs while improving yield.
SiPho PICs are already in hyperscale AI transceivers, with NPO and CPO designs underway.
OFC 2026 showed 400G/800G ZeroFlap transceivers, 800G/1.6T optical DSPs, and a path to 3.2T CPO.
FY2027 optical revenue is expected to exceed $500M (mainly transceivers + DSP), with SiPho integration adding upside.
The market still hasn't fully priced in the SiPho/CPO ramp yet.
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