Credo Launches High-Performance Bluebird DSP for 1.6Tbps Networks

Credo Technology Group Holding Ltd CRDO has announced a breakthrough in optical networking technology. The company unveiled its high-performance, low-power Bluebird Digital Signal Processor (DSP) designed for 1.6Tbps optical transceivers. This cutting-edge solution enables energy-efficient 224Gbps per lane PAM4 data transmission, a critical advancement that helps unlock the full computational potential of next-generation GPUs, cloud computing infrastructures, AI-driven applications and hyperscale networks.

Next-generation AI networks require high bandwidth, ultra-low latency, reliability and power efficiency; however, existing 1.6T transceivers face power dissipation issues that limit their adoption. Credo’s Bluebird DSP directly addresses these limitations by combining advanced CMOS process technology with proprietary design innovations, achieving industry-leading power efficiency. As a result, the new DSP enables 1.6T transceivers to operate at less than 20 watts of power consumption, significantly easing deployment in dense data center environments.

What Does Bluebird DSP Offer?

The Bluebird DSP supports configurations of four or eight lanes of 224Gbps PAM4, enabling both high-density 800G transceivers and high-capacity 1.6T transceivers. Available in both full DSP and Linear Receive Optics (LRO) variants, the solution caters to diverse networking architectures, whether for scale-up or scale-out deployments. Specifically, the design maintains latency below 40 nanoseconds in each direction, optimizing GPU-to-GPU communications and enhancing performance during demanding tasks such as large language model (LLM) training and inference.

In addition to performance, the Bluebird DSP comes equipped with a robust suite of telemetry features that enable real-time link monitoring and diagnostics. These capabilities maximize system uptime, simplify failure isolation, assist in debugging and streamline production testing. The DSP also includes a carefully tailored set of performance optimization tools for both electrical and optical interfaces. These features can be dynamically enabled to improve link margin in challenging environments or disabled to optimize power consumption in large, energy-conscious deployments.

Credo Technology Group Holding Ltd. Price and Consensus

Credo Technology Group Holding Ltd. price-consensus-chart | Credo Technology Group Holding Ltd. Quote

Furthermore, the Bluebird DSP supports IEEE-compliant inner and outer Forward Error Correction (FEC), allowing fiber reach of 500 meters, 2 kilometers and beyond. This flexibility enables customers to use a single DSP design across a wide range of applications, reducing complexity and cost.

Strength in the optical business has consistently been a key growth catalyst for Credo. Its portfolio includes both DSP and LRO solutions, supporting port speeds of up to 1.6 terabits per second, in line with hyperscalers’ plans for next-generation network architectures. The company is making significant investments in both copper and optical solutions to further diversify its market presence. The optical DSP segment, in particular, has maintained strong momentum, positioning Credo to potentially double its optical revenues again in the current fiscal year.

Recently, Credo reported its first-quarter fiscal 2026 results, with adjusted earnings per share exceeding the Zacks Consensus Estimate and showing year-over-year growth. The company’s revenues also surpassed expectations, soaring 273.6% year over year, driven by strong performance in its product business. Credo expects continued revenue growth, supported by broader diversification across customers, protocols and applications.

For fiscal 2026, the company anticipates mid-single-digit sequential revenue growth, resulting in roughly 120% year-over-year growth. The company had earlier projected revenues to surpass $800 million, implying more than 85% year-over-year growth. Non-GAAP net margin is projected to be around 40% both in the upcoming quarters and for fiscal 2026.

CRDO’s Zacks Rank & Stock Price Performance

CRDO currently sports a Zacks Rank #1 (Strong Buy). Shares of the company have surged 260.6% in the past six months compared with the Zacks Electronics-Semiconductors industry's growth of 50.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider From the Computer and Technology Space

Some other top-ranked stocks from the broader technology space are Ubiquiti Inc. UI, Sono-Tek Corporation SOTK and InterDigital, Inc. IDCC. UI sports a Zacks Rank of 1 while SOTK and IDCC carry a Zacks Rank #2 (Buy) at present.

UI’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 49.5%. In the last reported quarter, Ubiquiti delivered an earnings surprise of 82.47%. Its shares have surged 97.8% in the past six months.

SOTK’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters while met in the other two, with the average surprise being 37.5%. In the last reported quarter, Sono-Tek delivered an earnings surprise of 50%. Its shares have gained 9% in the past six months.

IDCC earnings beat the consensus estimate in three of the trailing four quarters while missing in one, with the average surprise being 54.27%. InterDigital’s long-term earnings growth rate is 15%. Its shares have jumped 131.2% in the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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