Key Highlights
- Credo Technology (CRDO) has entered into an agreement to purchase DustPhotonics through a combination of $750M cash and approximately 920,000 shares of CRDO stock.
- DustPhotonics specializes in Silicon Photonics Integrated Circuit (SiPho PIC) technology utilized in optical transceivers.
- Performance-based milestones could trigger the issuance of an additional 3.21 million shares to DustPhotonics stakeholders.
- The transaction is slated to finalize during Q2 2026 and contribute positively to non-GAAP EPS starting fiscal 2027.
- CRDO shares rose 15% during pre-market hours Tuesday, building on Monday’s 12% increase following a Jefferies Buy recommendation.
Credo Technology (CRDO) continues its upward momentum following the announcement of its acquisition of DustPhotonics, structured as $750 million in cash combined with approximately 920,000 shares of CRDO common stock.
Credo Technology Group Holding Ltd, CRDO
The acquisition announcement propelled CRDO shares to $154.68 during pre-market trading Tuesday, representing a 15% increase. This follows Monday’s 12% rally triggered by Jefferies launching coverage with a Buy recommendation and establishing a $175 price target.
Through Monday’s closing bell, the stock has delivered a remarkable 243% gain over the trailing twelve months.
Credo $CRDO is acquiring silicon photonics company DustPhotonics for $750M in cash plus about 0.92M shares, with additional earnout shares tied to milestones. The deal should help lift its combined optical revenue to more than $500M in fiscal 2027. pic.twitter.com/oHLu3177XL
— Wall St Engine (@wallstengine) April 13, 2026
DustPhotonics specializes in Silicon Photonics Photonic Integrated Circuit technology — commonly abbreviated as SiPho PIC — which powers optical transceivers. This technology enables data transmission through light-based signals instead of traditional electrical pathways.
The acquisition broadens Credo’s current product portfolio, which encompasses copper cabling solutions for server interconnects alongside optical-networking components. The addition of SiPho circuits equips the company with an enhanced suite of solutions for managing data flow within AI infrastructure environments.
Credo characterized the merged entity as a “vertically integrated connectivity stack” encompassing SerDes, Digital Signal Processing, Silicon Photonics, and system integration capabilities.
The company stated it can now serve “both electrical and optical interconnects across the full AI infrastructure buildout” — covering the complete spectrum of server-to-server communication methods.
Performance Incentives Could Trigger Additional Equity
The purchase agreement incorporates a contingent consideration structure. Credo could distribute up to 3.21 million additional shares should DustPhotonics achieve specified financial benchmarks.
This arrangement links a portion of the overall transaction value to operational outcomes, reducing immediate shareholder dilution while maintaining seller motivation.
Optical Division Revenue Projection for Fiscal 2027
Credo has established a revenue goal of $500 million from its broadened optical business segment by fiscal year 2027.
This specific benchmark provides investors with a measurable metric to monitor throughout the integration phase.
The acquisition is anticipated to reach completion during Q2 2026, subject to regulatory clearances and customary closing requirements.
Credo indicated the transaction will enhance non-GAAP earnings per share beginning in fiscal 2027.
The consecutive sessions of strong performance — Monday’s analyst-driven momentum combined with Tuesday’s acquisition news — represent one of the stock’s most impressive two-day advances in recent periods.
CRDO reached $154.68 in pre-market activity Tuesday, marking approximately 27% growth across the combined two-session period.
