Shares of Credo Technology, which makes electrical cables and digital signal processors used in artificial intelligence data centers, fell sharply Tuesday despite an earnings beat.

The AI connectivity firm reported adjusted earnings of $1.20 a share, just beating estimates for $1.17 a share. Revenue came in at $479 million, above the $475 million high end of its own forecast and estimates of $473 million among analysts polled by FactSet.

Shares were down 7% at $192 in after-hours trading.

Credo's copper cables are used to connect AI servers to networking switches. Known as active electrical cables, they are embedded with microchips that boost electric signals traveling along them, thus reducing the both the amount of copper needed for them and using less energy than optical cables.

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