CRDO Stock Soars Post-Market On DustPhotonics Acquisition: Retail Eyes Surge To Over $200

• Credo said that it will pay $750 million in cash upfront and about 0.92 million shares of Credo common stock for DustPhotonics’ acquisition.
• The transaction is expected to close in the second quarter of calendar year 2026. 
• Prior to the deal announcement, Jefferies initiated coverage of Credo Technology with a ‘Buy’ rating and $175 price target on Monday.

Shares of Credo Technology Group Holding (CRDO) surged more than 10% in Monday’s extended trading hours after the company announced the acquisition of DustPhotonics, a developer of Silicon Photonics Photonic Integrated Circuit (SiPho PIC) technology for optical transceivers.

Credo said that it will pay $750 million in cash upfront and nearly 1 million shares of Credo common stock for DustPhotonics’ purchase. Credo said that it may also pay incremental contingent consideration of up to approximately 3.21 million shares in addition, based on the achievement of certain financial milestones.

The semiconductor company said that the deal will be accretive to adjusted earnings per share in its fiscal 2027.

The transaction is expected to close in the second quarter of calendar year 2026.

Deal Rationale

The acquisition will accelerate Credo's optical interconnect roadmap and expand its served addressable market in the global optical industry. DustPhotonics brings advanced silicon photonics (SiPho PICs) enabling higher speeds, lower costs, and improved reliability for AI data centers, the company said.

Integrating these capabilities will boost Credo’s ZeroFlap platform, reduce supply dependencies, and accelerate innovation.

Credo said that it believes it has reached an inflection point in its optical business, and the acquisition of DustPhotonics will help its optical portfolio generate more than $500 million in revenue in fiscal 2027, driven by strong customer traction and expanding adoption across hyperscale AI deployments, the company said.

William Brennan, Chairman, and CEO, said the deal was “a defining step in Credo’s strategy to lead across the full spectrum of AI connectivity.”

Analyst Confidence

Prior to the deal announcement, Jefferies initiated coverage of Credo Technology with a ‘Buy’ rating and $175 price target on Monday. The analyst said that Credo offered a "meaningful opportunity” to invest in a premium growth company that was trading at a significantly discounted valuation.

The analyst said that it sees a "significant disconnect" between the market's perception of Credo's AI opportunity over the next several years relative to its actual opportunity.

As per data from Koyfin, analysts have a 12-month average price target of $197.94 on the company’s shares, representing an upside potential of 47.32% from the last close.

Retail Reaction

On Stocktwits, retail sentiment around CRDO shares jumped from ‘neutral’ to ‘bullish’ over the past day, while message volumes surged from ‘low’ to ‘high’ levels.

One bullish user called the deal a “Massive Acquisition Move,” while highlighting the key takeaways.

Another user predicted the stock would go back to $200 levels, where it was trading at around December 2025.

CRDO stock has rallied more than 243% in the past year.

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