Key Takeaways
- Credo Technology finalized its DustPhotonics purchase through a transaction valued at $750 million in cash plus roughly 0.92 million common shares.
- The acquired company specializes in silicon photonics PIC solutions spanning 800G, 1.6T, and 3.2T near-packaged and co-packaged optical technologies.
- Management anticipates the integrated product suiteâfeaturing ZeroFlap optical transceivers, optical DSPs, and silicon photonicsâwill fuel expansion in fiscal 2027.
- Pre-market activity showed CRDO at $220.32, down 0.41%, though shares have rallied 253% year-over-year.
- Wall Street firms Stifel, Jefferies, and Rothschild Redburn maintain Buy recommendations with price objectives between $206 and $250.
Credo Technology (CRDO) wrapped up its purchase of DustPhotonics on Wednesday, bolstering its optical and copper connectivity offerings with advanced silicon photonics technology.
Credo Technology Group Holding Ltd, CRDO
Shares traded at $220.32 in pre-market hours, slipping 0.41% from the previous close, yet the equity has soared 253% across the trailing twelve months and remains close to its 52-week peak of $233.70.
The transaction, initially unveiled in April, consists of $750 million in immediate cash consideration alongside approximately 0.92 million common shares. Additional financial details were not made public.
DustPhotonics focuses on silicon photonics photonic integrated circuit (SiPho PIC) technologies. The acquisition expands Credo’s optical connectivity capabilities across 800-gigabit, 1.6-terabit, and 3.2-terabit near-packaged optics (NPO) and co-packaged optics (CPO) solutions.
The unified technology platform now encompasses SerDes, digital signal processing, silicon photonics, and system-level integration for electrical and optical interconnectsâcreating a comprehensive solution set for high-bandwidth data infrastructure applications.
Fiscal 2027 Revenue Goals
Management indicated that the merged product lineupâcomprising ZeroFlap optical transceivers, optical DSPs, and silicon photonics offeringsâshould serve as a significant revenue catalyst by fiscal 2027. The semiconductor firm recorded 226% revenue expansion over the past twelve months and maintains a gross profit margin of 67.83%.
CEO Bill Brennan described the transaction’s completion as “an important milestone,” emphasizing the aligned commitment to innovation and customer value between both organizations.
Ronnen Lovinger, who assumed the role of VP of Silicon Photonics at Credo through the acquisition, noted the technology addresses escalating bandwidth and power efficiency requirements in data infrastructure deployments.
Wall Street’s Perspective
Analyst sentiment remains constructive. Stifel elevated its price objective to $250 while reaffirming a Buy stance, pointing to projected revenue exceeding $430 million and non-GAAP EPS of $1.02, underpinned by active electrical cable deployments across major hyperscale customers.
Jefferies increased its target to $225 after the deal’s finalization, estimating optics-related revenue could surpass $500 million by fiscal 2027.
Rothschild Redburn launched coverage with a Buy recommendation and $206 price target, highlighting Credo’s established AEC cable operations as the foundation.
InvestingPro’s assessment indicates the shares currently trade above the platform’s Fair Value calculationâa consideration given the substantial appreciation.
Beyond the DustPhotonics transaction, Credo unveiled a partnership with Rebellions to incorporate ZeroFlap AEC cables into the RebelPOD AI cluster platform. The semiconductor company is also scheduled to participate in TSMC’s 2026 Technology Symposium events to demonstrate its memory product innovations.
As of Wednesday’s pre-market session, CRDO stood at $220.32, supported by three analyst Buy recommendations with price targets spanning $206 to $250.
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