Key Takeaways
- Credo Technology (CRDO) has entered an agreement to purchase DustPhotonics for $750M cash plus approximately 920,000 shares of CRDO stock.
- DustPhotonics specializes in Silicon Photonics Integrated Circuit (SiPho PIC) technology for optical transceiver applications.
- An additional earnout of up to 3.21 million shares could be issued if specific financial performance targets are achieved.
- Transaction completion is anticipated in Q2 2026, with expected accretion to non-GAAP EPS beginning in fiscal 2027.
- CRDO shares rallied 15% in pre-market hours Tuesday, building on Monday’s 12% gain triggered by a Jefferies Buy recommendation.
Credo Technology (CRDO) is enjoying a powerful two-session rally after revealing plans to acquire DustPhotonics in a transaction valued at $750 million in cash combined with roughly 920,000 shares of CRDO common stock.
Credo Technology Group Holding Ltd, CRDO
The acquisition announcement propelled CRDO shares up 15% to $154.68 during Tuesday’s pre-market session. This follows Monday’s 12% advance after Jefferies launched coverage on the stock with a Buy recommendation and set a $175 price objective.
Since this time last year through Monday’s closing bell, the stock has surged an impressive 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 specializes in Silicon Photonics Photonic Integrated Circuit technology — commonly referred to as SiPho PIC — which powers optical transceivers. These advanced chips enable data transmission through light signals instead of traditional electrical currents.
This acquisition broadens Credo’s current product portfolio, which encompasses copper cabling for server connectivity and optical networking solutions. By incorporating SiPho circuit technology, the firm gains enhanced capabilities to serve the data movement requirements within AI infrastructure environments.
Credo characterized the merged entity as a “vertically integrated connectivity stack” spanning SerDes, Digital Signal Processing, Silicon Photonics, and complete system integration.
According to the company, this combination enables it to serve “both electrical and optical interconnects across the full AI infrastructure buildout” — covering the entire spectrum of server-to-server communication technologies.
Performance-Based Earnout Structure Included
In addition to the initial purchase price, the transaction features a performance-based component. Credo could issue up to 3.21 million additional shares depending on whether DustPhotonics achieves predetermined financial benchmarks.
This arrangement links a portion of the overall transaction value to future results, reducing immediate shareholder dilution while maintaining seller motivation.
Optical Division Revenue Goal Established
Credo has established a revenue objective of $500 million from its enhanced optical business segment by fiscal year 2027.
This provides shareholders with a measurable benchmark to monitor as the companies merge operations.
The transaction is slated to close during Q2 2026, subject to regulatory clearance and customary closing requirements.
Credo projects the acquisition will contribute positively to non-GAAP earnings per share starting in fiscal 2027.
The consecutive daily advances — Monday’s positive analyst coverage combined with Tuesday’s acquisition news — represent one of the stock’s most significant two-day rallies in recent months.
CRDO was trading at $154.68 before Tuesday’s opening bell, reflecting a combined gain of approximately 27% across both sessions.
