Key Takeaways
- Credo Technology finalized its purchase of DustPhotonics through a transaction valued at $750 million in cash plus roughly 0.92 million shares.
- DustPhotonics contributes silicon photonics PIC expertise spanning 800G, 1.6T, and 3.2T near-packaged and co-packaged optical solutions.
- Management anticipates the integrated product lineup — featuring ZeroFlap transceivers, optical DSPs, and silicon photonics — will fuel expansion by fiscal 2027.
- Shares traded at $220.32 in pre-market Wednesday, slipping 0.41%, yet the stock has jumped 253% in the trailing twelve months.
- Three Wall Street firms — Stifel, Jefferies, and Rothschild Redburn — maintain Buy recommendations with targets spanning $206 to $250.
Credo Technology (CRDO) finalized its purchase of DustPhotonics on Wednesday, integrating silicon photonics technology into its established lineup of optical and copper connectivity solutions.
Credo Technology Group Holding Ltd, CRDO
Shares changed hands at $220.32 during pre-market trading, declining 0.41% on the session, although the equity has rallied 253% across the past year and remains close to its 52-week peak of $233.70.
The transaction was initially revealed in April. Under the agreement, Credo paid $750 million upfront in cash alongside approximately 0.92 million common shares. Additional financial details were not made public.
DustPhotonics focuses on silicon photonics photonic integrated circuit (SiPho PIC) platforms. The acquisition expands Credo’s optical connectivity offerings across 800G, 1.6T, and 3.2T near-packaged optics (NPO) and co-packaged optics (CPO) technologies.
The unified technology platform now encompasses SerDes, digital signal processing, silicon photonics, and system-level integration for electrical and optical connectivity. This represents a comprehensive suite for high-performance data center infrastructure.
Fiscal 2027 Revenue Target in Focus
Management indicated the merged product suite — encompassing ZeroFlap optical transceivers, optical DSPs, and silicon photonics offerings — is projected to accelerate revenue growth in fiscal 2027. The firm delivered revenue expansion of 226% in the trailing twelve months and maintains a gross profit margin of 67.83%.
Chief Executive Bill Brennan described the transaction close as “an important milestone,” highlighting the alignment between both organizations on innovation and customer value creation.
Ronnen Lovinger, now serving as VP of Silicon Photonics at Credo following the acquisition, emphasized the technology’s ability to meet escalating bandwidth and power efficiency requirements in infrastructure deployments.
Wall Street Weighs In
Equity research analysts have responded positively. Stifel increased its price objective to $250 while maintaining a Buy stance, pointing to anticipated revenue exceeding $430 million and non-GAAP earnings per share of $1.02, driven by active electrical cable deployments at several hyperscale cloud providers.
Jefferies elevated its target to $225 after the deal completion, forecasting optical product revenue could surpass $500 million by fiscal 2027.
Rothschild Redburn launched coverage with a Buy recommendation and a $206 price target, emphasizing Credo’s foundational AEC cable operations as the primary revenue driver.
InvestingPro’s valuation model suggests the stock is currently trading above its calculated Fair Value — a consideration for investors following the substantial price appreciation.
In addition to the DustPhotonics transaction, Credo recently disclosed a partnership with Rebellions to incorporate ZeroFlap AEC cables into the RebelPOD AI cluster platform. The company is also scheduled to participate in TSMC’s 2026 Technology Symposium series to present its memory connectivity solutions.
As of Wednesday’s pre-market session, CRDO traded at $220.32, with three analyst Buy ratings and price objectives ranging from $206 to $250 currently in place.
