Credo’s Record Q2 Validates AI Interconnect Thesis with Strong Growth and Profitability

Credo Technology Group Holding Ltd reported an impressive second quarter (Q2 FY2026), reinforcing its role in powering AI data center connectivity and validating its AI interconnect thesis. The company recorded $268 million in revenue, a 20% sequential increase that beat both its own guidance and Wall Street expectations. This surge reflects strong demand for Credo’s high‑speed connectivity solutions, particularly its Active Electrical Cables (AECs), which are becoming a de facto industry standard for inter‑rack connectivity in AI infrastructure. Credo also delivered robust profitability, with a non‑GAAP gross margin of 67.7%, non‑GAAP net income of $128 million, and healthy operating and free cash flows. The margin trend remains strong even as industry conditions evolve. However, risks remain, including high customer concentration—with the top four customers accounting for a large share of total revenue—and expectations that gross margins may normalize toward 63%–65% over time. Looking ahead, Credo’s ZeroFlap optical technology and other next‑generation connectivity products are positioned to drive future growth, with initial revenues anticipated in fiscal 2027. Analysts and investors continue to view the company favorably, citing strong fundamentals and exposure to the ongoing AI buildout, though valuation and margin trends warrant close attention. #CredoQ2 #AIInterconnect #TechEarnings #SemiconductorGrowth #SlimScan #GrowthStocks #CANSLIM