Street Calls of the Week
SAN JOSE, Calif. - Credo Technology Group Holding Ltd (NASDAQ:CRDO), whose stock has delivered an impressive 354% return over the past year, announced Monday it has completed the acquisition of Hyperlume, Inc., a privately-held developer of microLED-based optical interconnect technology for chip-to-chip communication. According to InvestingPro data, the company maintains strong financials with a healthy current ratio of 7.41 and minimal debt.
The acquisition aims to expand Credo’s portfolio of high-speed connectivity solutions by incorporating Hyperlume’s miniature light-emitting diode technology, which is designed to address growing bandwidth demands in AI-driven data infrastructure. This strategic move comes as Credo demonstrates robust growth, with revenue surging 175% year-over-year and maintaining impressive gross margins of 66%.
MicroLED technology is emerging as a potential solution for data center interconnects, offering high-speed, energy-efficient and low-latency data transmission capabilities needed for scaling AI clusters. Hyperlume’s technology utilizes specialized ultra-fast microLEDs and low-power circuitry to overcome bandwidth limitations in traditional electronic interconnects.
"MicroLED technology aligns with our mission to innovate and advance high-speed connectivity by enabling faster, more reliable, more energy-efficient, and scalable solutions for the AI era," said Bill Brennan, president and CEO of Credo.
Mohsen Asad, CEO at Hyperlume, stated, "MicroLED technology is poised to help shape the future of computing - one that is more efficient and sustainable while bringing a new level of connectivity as AI models continue to scale."
The financial terms of the acquisition were not disclosed in the press release.
Credo provides connectivity solutions optimized for optical and electrical Ethernet applications, including emerging port markets ranging from 100 gigabits per second to 1.6 terabits per second. The company’s product portfolio includes integrated circuits, active electrical cables, and serializer/deserializer chiplets. With 9 analysts recently revising earnings estimates upward, InvestingPro subscribers can access over 20 additional key insights and a comprehensive Pro Research Report, helping investors make informed decisions about this rapidly growing technology company.
In other recent news, Credo Technology Group Holding Ltd. reported impressive financial results for the July quarter, with revenue reaching $191 million and earnings per share of $0.35. The company has provided guidance for the October quarter, projecting revenue of $235 million, which is about 15% higher than the consensus estimate of $202 million. Following these results, Mizuho raised its price target for Credo Technology to $155 while maintaining an Outperform rating. Similarly, Needham increased its price target to $150 from $85, citing the company’s improved guidance and an expected 120% year-over-year revenue growth for fiscal year 2026.
TD Cowen also raised its price target for Credo Technology to $160, maintaining a Buy rating due to the company’s strong financial performance and enhanced growth outlook. William Blair initiated coverage of Credo Technology with an Outperform rating, highlighting the company’s expanding product portfolio, particularly in Ethernet AEC and optics. Furthermore, Credo unveiled its new Bluebird Digital Signal Processor designed for 1.6Tbps optical transceivers, which addresses power consumption challenges in existing transceivers. This development could potentially alleviate deployment constraints related to cooling and power delivery. These updates reflect the company’s strategic advancements and strong market position.
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