Credo Technology Group Holding Ltd (CRDO) shares fell 7.5% on Friday, October 23, according to Investing.com, a second day of losses that MoneyCheck also reported. The selling followed comments from a smaller rival about the cables that link servers inside AI data centers.

What did MaxLinear say about Credo?

On its third quarter call on October 22, MaxLinear Inc. (MXL) chief executive Kishore Seendripu put Credo's share of the active electrical cable market at 93% to 99%, according to Investing.com. On the call, MaxLinear said the market was now diversifying as the engineering problem gets harder.

MaxLinear set a goal of 20% to 30% of the 1.6T cable segment over the next couple of years. It plans to focus on one or two large U.S. data center operators rather than many.

What is an active electrical cable?

An active electrical cable, or AEC, is a copper cable with a small signal chip at each end. The chip cleans up the signal so copper can carry very fast data across a rack. MaxLinear said on the call that it will sell only the silicon, to cable makers or paddle card suppliers, rather than build finished cables. That means its revenue per cable will be smaller than a full cable sale.

How big is MaxLinear's data center business?

MaxLinear's earnings release reported third quarter revenue of $218.1 million, up 72% from a year earlier. Its infrastructure business grew 210% year over year, which the company tied to optical AI data center products. The release named its Rushmore and Annapurna families as 1.6T capable optical and electrical products. It guided fourth quarter revenue to $240 million to $260 million.

The midpoint of that range, $250 million, would be about 15% above third quarter revenue of $218.1 million, as calculated by Trend & Ticker from the release. On the call, the company said 1.6T revenue starts in 2027, with a stronger ramp in 2028.

What else weighed on Credo stock?

Edgewater Research saw limited signs of large 1.6T AEC deployments in the biggest AI programs in the near term, according to Investing.com. The firm also cited a Cisco program seeking quotes for 100,000 1.6T cables a month, with Broadcom and MaxLinear named as possible chip suppliers.

MaxLinear did not name the one or two data center customers it is pursuing. Until it does, the size of any share shift at 1.6T stays unknown.