Published on: 2026-09-17
Updated on: 2026-09-17
Lumentum jumped 9.59% and Credo 7.38% on September 16 as attention returned to the networking hardware behind increasingly large AI clusters. Lumentum has now risen roughly 184% from its January 16 close, while Credo has recovered about 67% from its February 4 close, even though 1.6T networking is only beginning to move from product launches toward broader deployment.
The 800G buildout showed how quickly a bandwidth upgrade can turn into revenue growth, putting the focus on how much of the next 1.6T cycle reaches Lumentum’s optical portfolio and Credo’s wider connectivity stack.
A 1.6T link carries up to 1.6 terabits per second, twice the nominal bandwidth of 800G. Broadcom’s 102.4 Tb/s Tomahawk 6 switch is already shipping in production volume, while NVIDIA’s Vera Rubin architecture provides 1.6 Tb/s of scale-out network bandwidth per GPU through ConnectX-9. Hardware capable of supporting the next bandwidth generation is reaching real systems before 1.6T revenue has scaled to the same degree.
| 1.6T signal | Current stage |
|---|---|
| Tomahawk 6 | Production shipping |
| Rubin networking | 1.6 Tb/s per GPU |
| ECOC 2026 | Multi-vendor demo scheduled |
| IEEE P802.3dj | Standards work ongoing |
The Ethernet Alliance has scheduled a live multi-vendor 1.6T interoperability demonstration for ECOC 2026 from September 21 to 23, while IEEE P802.3dj continues through standardization.
Lumentum says 1.6T adoption is only beginning to layer into its cloud-module business, and Credo launched its latest 224G-based 1.6T optical transceivers on September 15. Qualification and deployment now determine how quickly 1.6T becomes material revenue.
Lumentum has more concentrated exposure to optics moving deeper into AI infrastructure, placing it among the public photonics stocks exposed to the AI optical buildout. Fiscal fourth-quarter 2026 revenue reached $1.006 billion, up 109.3% from $480.7 million a year earlier, while optical circuit switching backlog has moved well above $400 million.
Credo covers more of the connection between those systems. Fiscal first-quarter 2027 revenue reached $479 million, up 114.7% year over year. Its portfolio spans active electrical cables, SerDes, optical DSPs, silicon photonics and 1.6T transceivers, giving it exposure across both electrical and optical connectivity.
| Exposure | Lumentum | Credo |
|---|---|---|
| Optical systems | Core business | Expanding portfolio |
| Active copper | Not a core AEC line | ZeroFlap AEC |
| 1.6T | Cloud modules ramping | New optics and AECs |
The distinction becomes clearer at short reach. Credo's active electrical cables can extend copper links to around 7 metres, where copper can still offer attractive power and cost for GPU-to-switch connections. Optics becomes more compelling as bandwidth, distance and cable density increase.
Credo therefore remains exposed on both sides of the crossover, while Lumentum gains more directly as optical connectivity moves closer to switches and accelerators.
Higher lane speeds and denser AI networks increase demand for the signal processing, photonics and optical components surrounding each 1.6T connection. The upgrade can therefore expand networking revenue beyond higher transceiver volumes alone.
Credo’s latest 1.6T platform combines a 224G-per-lane optical DSP, Kfir200 silicon-photonics PIC and real-time PILOT diagnostics, extending its exposure into more of the electronics behind each optical link.
Lumentum reaches further into the optical stack through 1.6T modules, lasers and technologies designed for co-packaged optics. Its 1.6T DR4 prototype uses four 400G optical channels and an eight-lane 200G electrical host interface.
Credo can capture more of the processing required to move data reliably at higher speeds, while Lumentum gains as rising bandwidth density pushes more optical content closer to switches and accelerators.
Coherent's AI-optics revenue ramp provides a useful historical benchmark. AI-related 800G revenue more than doubled sequentially to above $100 million in fiscal Q2 2024, then rose almost another 80% to nearly $200 million the following quarter. Coherent was already tracking toward more than $250 million for fiscal Q4 as deployments accelerated.
Lumentum later reported $424.1 million of Cloud & Networking revenue in fiscal Q4 2025, up 66.5% year over year, with 800G modules among the products driving the increase. The comparison does not establish that 1.6T will repeat the same growth rate, but it shows how quickly a bandwidth generation can move from qualification into commercially significant revenue once volume deployments begin.
Lumentum is guiding fiscal first-quarter 2027 revenue to $1.225 billion to $1.275 billion, up from $1.006 billion in the June quarter, with a non-GAAP operating margin of 39.5% to 40.5%. Its 1.6T cloud-module ramp is already beginning, so subsequent results can show whether that contribution becomes large enough to strengthen the company’s growth and margin profile.
Credo enters the same test from a different starting point. Revenue reached $479 million last quarter and is expected to rise to $525 million to $535 million in fiscal Q2 2027, while non-GAAP gross margin is guided to 67% to 69%. Its 224G-based 1.6T optical portfolio was announced only on September 15, leaving the timing and scale of its revenue contribution less visible today.
The 800G cycle showed how quickly deployment can become material revenue. For 1.6T, stronger confirmation will come from rising optical contribution, sustained AEC demand and margins that hold as volumes scale. Until those figures become more visible, the hardware cycle remains further ahead than the financial evidence.
