By George Glover

Credo Technology stock was racking up more gains on Tuesday after the electrical cable provider said it would be buying a chip maker as it bids to become the dominant player in artificial-intelligence connectivity.

Shares jumped 15% to $154.68 ahead of the opening bell. Futures tracking the S&P 500 gained 0.2% as investors hoped for a peace deal between the U.S. and Iran.

Credo said after Monday's close of trading that it had agreed to buy DustPhotonics, which develops silicon photonics photonic integrated circuit (SiPho PIC) technology, for $750 million in cash and 920,000 Credo shares. Credo may pay 3.21 million additional shares if certain financial milestones are reached.

Analysts see Credo as a potential winner from the AI boom because the company makes the copper cables needed to connect servers. The stock has risen 243% over the past year through Monday's close.

Credo's other offerings include optical-networking components. Buying DustPhotonics will expand its portfolio to include SiPho circuits, chips which transmit data using light.

Credo said the deal, which is expected to close sometime this quarter, would give it "a vertically integrated connectivity stack" and enable it to address "both electrical and optical interconnects across the full AI infrastructure buildout."

The company expects its expanded optical division to generate $500 million in revenue in fiscal 2027.

The acquisition put shares on course for their second double-digit rally in a row. Credo jumped 12% on Monday after Jefferies initiated the stock at Buy, with a $175 price target.

Write to George Glover at george.glover@dowjones.com

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April 14, 2026 05:07 ET (09:07 GMT)

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