Scale-Out Revolution: Broadcom’s Tomahawk 6, AMD’s Data Center Upswing, Credo’s Record-Q4
Welcome, AI & Semiconductor Investors,
Broadcom shatters the 100-Tb/s barrier and challenges proprietary fabrics, AMD doubles down on MI350 momentum amid export headwinds, and Credo delivers a triple-digit revenue surge fueled by hyperscale connectivity.— Let’s Chip In
What The Chip Happened?
🚀 Broadcom’s Tomahawk 6 Breaks the 100-Tbps Barrier
⚡ AMD Banking on Breakthroughs at the BofA Tech Conference
🔥 CRDO’s Q4 Surge: AI Connectivity Star Lights Up Earnings
[Credo Technology Q4 2025: Surging AI-Driven Demand Lifts Revenue]
Read time: 7 minutes
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Broadcom (NASDAQ: AVGO)
🚀 Broadcom’s Tomahawk 6 Breaks the 100-Tbps Barrier
What The Chip: On June 3, 2025, Broadcom unveiled Tomahawk 6, a next-gen switch ASIC that offers 102.4 Tb/s of aggregate Ethernet throughput—twice the current market standard. This breakthrough aims to power massive AI clusters, potentially hitting one million+ accelerators in scale-out designs.
The Situation Explained:
🏆 Record-Breaking Performance: Tomahawk 6 ships at 102.4 Tb/s on a single chip, delivering double the bandwidth of current 51.2 Tb/s merchant switches. “Tomahawk 6 is not just an upgrade—it’s a breakthrough,” said Ram Velaga, Broadcom’s senior VP for Core Switching.
⚡ Scale-Up and Scale-Out: The chip supports 512 XPUs in one-hop “in-rack” networks and can scale out to over 100,000 accelerators in just two tiers, significantly reducing AI cluster complexity.
🔍 AI-Optimized Routing: Broadcom’s Cognitive Routing 2.0 offers dynamic congestion control, advanced telemetry, and packet trimming—key to speeding up modern AI tasks like mixture-of-experts and large-language-model inference.
🏭 Co-Packaged Optics: Tomahawk 6 will also come with a CPO (co-packaged optics) option that cuts power and lowers latency. This feature appeals to hyperscale data centers seeking high-port-density 800G and 1.6T solutions.
🔗 Open Ethernet, Open Software: Broadcom champions “Scale-Up Ethernet” (SUE) for unifying scale-up and scale-out networks on an open, standards-based platform. Multiple partners—Arista, Juniper, Nokia, and more—are already building new switches and management software around Tomahawk 6.
🌐 Potential IB Disruption: By offering high bandwidth on Ethernet, Tomahawk 6 challenges Nvidia’s InfiniBand in large-scale AI deployments. Bloomberg Intelligence’s Kunjan Sobhani noted how Tomahawk 6 “gives hyperscalers an open, standards-based fabric—free of proprietary lock-in.”
Why AI/Semiconductor Investors Should Care: Tomahawk 6 could reshape AI infrastructure by simplifying networks, lowering costs, and offering unprecedented scale. Hyperscalers who adopt Tomahawk 6 stand to gain 15–25% in cap-ex savings, and this shift to open Ethernet may dent the market share of proprietary networking solutions. For investors, Broadcom’s leap forward highlights both the rising demand for next-level AI hardware and the potential for further margin expansion in cloud networking infrastructure.
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Advanced Micro Devices, Inc. (NASDAQ:AMD)
⚡AMD’s Banking on Breakthroughs at the BofA Tech Conference
What The Chip: AMD leaders Jean Hu (CFO) and Matt Ramsay (Head of Investor Relations) took the stage at the Bank of America Global Technology Conference on June 3, 2025, to discuss the company’s robust strides in AI and high-performance computing. They highlighted how new data center GPUs like MI350 are propelling AMD’s growth, while tariffs and export license restrictions create short-term headwinds.
The Situation Explained:
🔋 Data Center GPU Boost: AMD expects a strong second half of 2025 driven by the launch of the MI350 series. They see particularly high interest in AI inferencing workloads, with Jean Hu noting “we are powering some of the most complicated models” at top hyperscalers.
⚙️ Navigating Export Controls: Management confirmed that roughly $700 million in Q2 revenue was impacted by new export license requirements, especially affecting China demand. However, overall data center guidance still points to year-over-year growth.
💻 PC Strength and ASP Gains: Despite broader macro concerns and tariffs, AMD’s PC business surged 36% in Q1 2025. Hu attributed a large portion of that increase to richer product mix and higher ASPs in both consumer and commercial PCs.
🚀 Scaling With Systems: AMD’s recent moves, including the ZT Systems acquisition, help them tackle more complex rack-scale solutions for GPUs, DPUs, and CPUs. According to Ramsay, the ZT design team adds “focus on manufacturability and time to market.”
💰 Gross Margin Outlook: While data center GPUs generally have lower margins than enterprise CPUs, Hu forecasts “modest gross margin improvement in the second half” due to rising demand for AMD’s server processors and the high-margin Embedded segment.
⛅ Macro Uncertainty: Management struck a cautious note on tariffs, export rules, and potential PC inventory pull-ins, maintaining a conservative outlook for the second half. Despite these unknowns, AMD’s strong product pipeline offers upside potential.
Why AI/Semiconductor Investors Should Care: AMD’s growing suite of data center GPUs underscores a big push into the AI market, where customization and general-purpose compute both matter. Their near-term transition from MI300 to MI350, combined with a richer mix of high-end PC and server products, suggests ongoing share gains and ASP momentum. Although external factors—particularly export restrictions and tariffs—pose a challenge, AMD’s continued innovation in high-performance GPUs and CPUs makes them a significant player worth investors’ close attention.
Credo Technology Group (NASDAQ: CRDO)
🔥 CRDO’s Q4 Surge: AI Connectivity Star Lights Up Earnings
What The Chip: Credo reported its Q4 2025 earnings on June 2, delivering blowout results driven by massive demand for its high-speed connectivity solutions across hyperscale data centers. Surging AI workloads, especially in GPU-intensive networks, fueled record revenue growth and spiked margins well above expectations.
The Situation Explained:
🚀 Revenue Skyrockets: Q4 sales hit $170 million, up 180% year-over-year. FY25 revenue topped $437 million—a 126% jump. Three hyperscalers each contributed over 10% of sales, highlighting Credo’s expanding customer base.
💰 Margins Impress: Non-GAAP gross margin climbed to 67.4%, driven by scale efficiencies, strong product mix, and leverage in manufacturing. CEO Bill Brennan credited “record-breaking revenue and profitability” as proof of the company’s execution.
🔌 AEC Momentum: Active Electrical Cables (AECs) remain the star of the show, connecting AI clusters more reliably and efficiently than traditional optical links. Demand surged among top hyperscalers, with Credo calling AECs the “de facto standard” for shorter-distance data center connectivity.
🔍 Optical Upside: Management sees robust opportunity in next-gen optical transceiver DSPs for 800G and beyond. They highlighted advanced 100G and 200G-per-lane designs with industry-leading power efficiency to target the largest cloud operators.
📈 Strong Guidance: Credo forecasts Q1 FY26 revenue of $185–$195 million, implying another quarter of triple-digit year-over-year growth and continued margin strength. Operating expenses are growing far slower than revenue, pushing non-GAAP operating margins near 40%.
⚠️ Risks & Tariffs: Tariff policy changes remain fluid, but Credo has diversified manufacturing across multiple geographies to mitigate exposure. Customer concentration is easing, yet still worth monitoring as large hyperscalers ramp quickly.
Why AI/Semiconductor Investors Should Care: Credo’s record results show how surging AI infrastructure spend extends beyond just the GPUs—connectivity is critical to every data center upgrade. By offering more power-efficient, reliable networking solutions, Credo is carving out a fast-growing niche in the modern AI stack. If the AI super-cycle persists, Credo’s connectivity expertise and system-level approach could turn it into a long-term winner in an evolving data center landscape.
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Disclaimer: This article is intended for educational and informational purposes only and should not be construed as investment advice. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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[Paid Subscribers] Credo Technology Q4 2025: Surging AI-Driven Demand Lifts Revenue
Date of Event: Monday, June 2, 2025
Executive Summary
*Reminder: We do not talk about valuations, just an analysis of the earnings/conferences
Credo Technology Group Holding Ltd (“Credo”), a leader in high-speed connectivity solutions for hyperscale data centers, reported a record-breaking fourth quarter (Q4) of fiscal 2025. On June 2, 2025, the company’s CEO, Bill Brennan, and CFO, Daniel Fleming, discussed the results on a conference call, highlighting exponential top-line growth powered by artificial intelligence (AI) workloads. Credo’s Q4 revenue soared to $170 million, a 26% sequential increase and a staggering 180% year-over-year (YoY) jump. This achievement lifted fiscal 2025 revenue to $437 million, representing 126% annual growth.
Credo’s product lines are squarely aligned with emerging AI infrastructure trends, focusing on active electrical cables (AECs), optical digital signal processors (DSPs), and retimer integrated circuits (ICs). Management showcased how these products deliver superior signal integrity, energy efficiency, and cost advantages for high-speed data center connectivity. Meanwhile, non-GAAP gross margin in Q4 reached 67.4%, highlighting Credo’s strong operating leverage despite large-scale manufacturing efforts. According to Bill Brennan, “Our agile approach strengthened partnerships with hyperscalers amid a rapidly evolving AI landscape.” This statement underscores the company’s commitment to servicing some of the most demanding data center operators in the world.
Looking ahead, Credo projects Q1 fiscal 2026 revenue of $185 million to $195 million, implying a 12% sequential rise at the midpoint. The company also expects non-GAAP gross margin to remain strong at 64% to 66%, reflecting stable product pricing and ongoing production efficiencies. Credo’s notable financial success and robust outlook capture the broader theme: AI-driven infrastructure expansions require state-of-the-art connectivity, positioning Credo to ride a multi-year growth wave.
Growth Opportunities
A central highlight of Credo’s growth story is its role in enabling high-bandwidth AI clusters. According to management comments, these clusters require port speeds from 100 gigabits per second (Gbps) up to 1.6 terabits per second (Tbps), emphasizing the need for next-generation hardware. Credo’s AECs and optical DSPs accelerate adoption by offering cost-effective solutions compared to traditional optics while simultaneously reducing power consumption.
Expanding AEC Market
Credo pioneered active electrical cable technology by building solutions that deliver “superior signal integrity, advanced features, and a more versatile form factor” compared to direct attach cables (DAC). Brennan noted that these AECs, already “the de facto standard for intra-rack applications,” are increasingly relied upon for rack-to-rack distances of up to 7 meters, particularly in AI settings where link reliability is paramount. Furthermore, demand is broadening, with three hyperscalers—each contributing at least 10% of Credo’s quarterly sales—expected to maintain or grow their share.Optical DSP Expansion