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3w ago

Credo to Buy DustPhotonics for $750 Million, Accelerating Move Into Silicon Photonics

Management now targets more than $500 million in optical sales with accretive earnings in fiscal 2027.

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ZeroFlap Optics is emerging as a meaningful new growth driver for Credo.
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Credo’s $500 million FY2027 optical revenue target gives investors a clear benchmark to judge whether its broader AI networking strategy can translate into meaningful growth.

Overview

  • Credo, which announced the deal Monday, will pay $750 million in cash plus about 0.92 million shares, with up to 3.21 million additional shares tied to performance, and it expects to close in the second quarter of 2026.
  • The acquisition brings silicon‑photonics photonic integrated circuits used in optical transceivers in‑house, creating a full stack across SerDes, optical DSPs, PICs, and module integration for AI data centers.
  • DustPhotonics’ chips consolidate multiple optical functions on one wafer, which reduces parts and manufacturing steps, improves yields and reliability, and supports speeds from 400G to 1.6T with a roadmap to 3.2T.
  • Credo projects more than $500 million in optical revenue in fiscal 2027 and says the deal will lift non‑GAAP earnings per share that year, while the CFO said the updated plan points to revenue growth of more than 75% year over year.
  • Shares jumped roughly 12% Monday and another about 15% in Tuesday pre‑market trading after a Jefferies Buy call, and analysts praised the expanded optics runway while flagging execution and customer‑concentration risk.