TLDR
- Credo Technology (CRDO) agreed to acquire DustPhotonics for $750M in cash plus ~920,000 CRDO stock.
- DustPhotonics develops Silicon Photonics Integrated Circuit (SiPho PIC) tech for optical transceivers.
- Credo may pay up to 3.21 million additional stock based on financial milestones being hit.
- The deal is expected to close in Q2 2026 and be accretive to non-GAAP EPS in fiscal 2027.
- CRDO stock jumped 15% pre-market on Tuesday, following a 12% gain on Monday after a Jefferies Buy rating.
Credo Technology (CRDO) is on a two-day winning streak after announcing a deal to buy DustPhotonics for $750 million in cash and around 920,000 CRDO stock.
Credo Technology Group Holding Ltd, CRDO
The news sent CRDO up 15% to $154.68 in pre-market trading on Tuesday. That came on top of a 12% jump on Monday after Jefferies initiated coverage with a Buy rating and a $175 price target.
Over the past year through Monday’s close, the stock has climbed 243%.
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 builds Silicon Photonics Photonic Integrated Circuit technology â known as SiPho PIC â used in optical transceivers. These chips transmit data using light rather than electrical signals.
The deal expands Credo’s existing line-up, which already includes copper cables for server connections and optical-networking components. Adding SiPho circuits gives the company a broader set of tools to address how data moves inside AI infrastructure.
Credo described the combined business as a “vertically integrated connectivity stack” that covers SerDes, Digital Signal Processing, Silicon Photonics, and system integration.
The company said it can now address “both electrical and optical interconnects across the full AI infrastructure buildout” â essentially, the full range of how servers talk to each other.
Milestone-Based Payout Could Add More Stock
Beyond the upfront consideration, the agreement includes a contingent payout. Credo may issue up to 3.21 million additional stock if DustPhotonics hits certain financial targets.
That structure ties a chunk of the total deal value to future performance, limiting Credo’s upfront dilution while keeping sellers incentivized.
Revenue Target Set for Fiscal 2027
Credo set a target of $500 million in revenue from its expanded optical division by fiscal 2027.
That’s a concrete number for investors to track as the integration gets underway.
The transaction is expected to close in Q2 2026, pending regulatory approvals and standard closing conditions.
Credo said the deal is expected to be accretive to non-GAAP earnings per share in its fiscal 2027.
The back-to-back gains â Monday’s Jefferies catalyst followed by Tuesday’s acquisition announcement â mark one of the stronger two-day runs for the stock in recent memory.
CRDO was trading at $154.68 ahead of Tuesday’s open, up roughly 27% over the two sessions combined.
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