Credo Technology Eyes Scale-Up Networks as Next AI Growth Driver

Marvell Technology plans to present a suite of next generation AI data center solutions at the OCP Global Summit 2026, highlighting new hardware for AI infrastructure, memory expansion, high speed connectivity, and integrated security. The offerings target the memory wall, faster networking requirements, and security for AI centric workloads. The showcase lines up with Marvell's push into AI data center infrastructure, spanning switching, optics, and memory expansion, with products including the Teralynx T100 102.4T switch, Structera CXL memory, and Ara 1.6T optics mapping to the high bandwidth AI clusters large cloud customers are building. The event supports the existing narrative rather than rewriting it, as the demos sit in the same AI connectivity and custom silicon areas analysts link to the US$12b FY27 and US$18b FY28 revenue guidance, with margins aiming for the 38% to 40% non GAAP range. The key test will be concrete follow through after the summit, such as new or expanded design wins with hyperscalers referencing Teralynx T100, Structera CXL, or 1.6T optics in coming quarters.

Tower Semiconductor and NewPhotonics announced high-volume shipments of laser-integrated, serviceable optical engine photonic integrated circuits developed for next-generation AI infrastructure interconnect. The products are built on Tower's PH18DA silicon photonics platform, which uses heterogeneously integrated indium phosphide components to place semiconductor optical amplifiers, modulators, lasers, and photodetectors on a single chip, and the companies say the integration reduces complexity and manufacturing variability while improving yield, reliability and time to market. Volume production today covers data rates from 800G to 1.6T, with 6.4T solutions planned for future volume manufacturing to serve both scale-out and scale-up architectures, and shipment of the 6.4T NPC505 chipsets is anticipated during the first half of 2027. NewPhotonics is the first player across the market to scale up production on Tower's PH18DA InP-on-silicon photonics platform, and Tower faces execution risks in scaling alongside it, along with competition from alternative architectures and other silicon photonics foundries. Tower's stock has rallied 99.97% in 2026, lifting its market capitalization to $25.85 billion, with an operating margin of 19.63%, a net margin of 16.94%, a trailing price-to-earnings ratio of 91.11x, a forward P/E of 38.46x and a return on equity of 9.98%.

Cisco Systems reported fiscal fourth-quarter product revenue of $13.459 billion, up from $10.886 billion a year earlier, while services revenue was nearly unchanged at $3.793 billion versus $3.787 billion. The August 12 results cover the quarter ended July 25. Services costs fell to $1.160 billion from $1.199 billion, lifting calculated gross margin to 69.4% from 68.3% and producing $45 million more gross profit on just $6 million of incremental sales. Product revenue supplied almost the entire $2.579 billion increase in consolidated quarterly sales, and a 10% decline in quarterly product sales would remove $1.35 billion of revenue, which services would need to grow 35.5% from their current base to offset. At the October 8 closing price of $114.89, Cisco traded at 22.6 times the $5.08 midpoint of management's fiscal 2027 adjusted EPS guidance and 28.5 times the $4.03 midpoint of GAAP guidance, while total product orders grew 35%, or 25% excluding hyperscalers.

Openreach is deploying Ciena's Waveserver platform, powered by WaveLogic 6 1.6Tb/s coherent technology, as part of its Optical Spectrum Extended Access portfolio. The deployment combines 400G and 800G client traffic over dedicated 1.6Tb/s wavelengths, with a compact 2RU chassis supporting up to 32 400G services, and enables Openreach to introduce national 800G services across the U.K. while providing a pathway to higher speeds. The solution will let Openreach offer wholesale customers tailored, high-capacity network services including connectivity for cable landing stations, data centers and core network nodes. Ciena faces competition from Corning, which announced a long-term partnership with NVIDIA to expand U.S.-based optical connectivity manufacturing capacity by 10 times and increase domestic fiber production capacity by more than 50%, and from Nokia, whose Network Infrastructure unit delivered double-digit growth in second-quarter 2026. Ciena shares have gained 27.3% in the past month, and the Zacks Consensus Estimate for its fiscal 2026 earnings has been revised upward over the past 60 days.

Lumentum chief executive officer Michael Hurlston said the company's components are completely sold out through early 2029, sending shares of optical equipment makers higher. In an interview in Tokyo on Friday, Hurlston said Lumentum cannot meet about 70% of demand for some products through next year and will not be able to address 30% of demand for other products through 2028, according to Bloomberg. Just six months ago, Hurlston said Lumentum was on track to sell out its capacity by 2028. In premarket trading, Lumentum gained 3.76%, Applied Optoelectronics rose 4.83%, Fabrinet advanced 2.35%, Coherent climbed 3.15%, and Lightwave Logic added 1.57%. Lumentum, which received a $2B investment from Nvidia earlier this year along with rival Coherent, supplies advanced indium phosphide devices that help enable high-speed cloud computing and data transmission, and analysts on average expect its sales to more than double this year.