Despite recent market concerns regarding the rise of co-packaged optics (CPO) technology and its potential threat to traditional interconnect solutions, BNP Paribas has stated in a newly released industry research report that fears driven by this technological iteration are significantly overblown. Within this technological context, the bank maintains a positive outlook on Astera Labs, Inc. (ALAB.US) and Credo Technology Group Holding Ltd (CRDO.US), which hold core positions in this sector.

Following an in-depth review of the DesignCon technology conference, the bank's analyst Karl Ackerman noted that while CPO technology theoretically offers higher integration, traditional copper interconnect solutions maintain a strong lifecycle at 224G per channel speeds. This technical advantage is expected to extend further into the future 448G per channel evolution phase. During the critical three-to-four-year window ahead, copper connections, owing to their excellent cost-effectiveness, high reliability, and low power consumption in intra-rack communication, will remain the preferred choice for data center architecture, rather than being rapidly replaced by optical solutions.

After attending the semiconductor-focused DesignCon event, Ackerman stated that even if 448G per channel copper interconnect technology becomes feasible, 224G per channel copper will still possess a "long application lifecycle" over the next three to four years. He further indicated that optical interconnect technologies like co-packaged optics optical I/O "could become more attractive at 448G per channel speeds, particularly in the domain of inter-rack communication."

As a leading provider of PCIe Retimers and CXL memory expansion solutions, Astera Labs, Inc. is deeply embedded within top-tier AI infrastructure supply chains, exemplified by Nvidia (NVDA.US). Its critical role in maintaining system signal integrity positions it as a core beneficiary of the AI construction boom. Despite market fluctuations arising from new protocols like UALink, the analyst's latest report firmly affirms the company's long-term value. The report not only sets a notably optimistic price target of $225 per share but also suggests that the company's strong technological moat equips it to withstand disruptions from short-term changes in technology roadmaps.

Concurrently, Credo Technology Group Holding Ltd's financial performance provides solid data supporting this optimistic view. According to its financial report, the company achieved explosive revenue growth of 272% year-over-year in the second quarter of fiscal year 2026. Its core product, Active Electrical Cables (AEC), has become the "de facto standard" for modern large-scale rack connectivity, consuming only half the power of comparable optical solutions while improving reliability by several orders of magnitude. BNP Paribas emphasized that as major cloud service providers' demand for high-efficiency connectivity continues to rise, Credo is well-positioned to translate its leading advantage with AEC solutions in the AI server market into long-term operational growth momentum.