"Mega Deal": Marvell Is in Talks to Acquire Lumentum, a Developer of Data Center Optics

Chipmaker Marvell Technology is in active talks to acquire Lumentum Holdings, a manufacturer of optical components for data centers, Bloomberg reported, citing sources. The deal could be announced as early as next week, the agency’s sources said. Representatives from Marvell and Lumentum did not respond to requests for comment.

This could be a potential “mega-deal” amid the race to expand capabilities in the field of artificial intelligence, the agency reports. Lumentum’s market capitalization is about $83 billion, while Marvell’s is approximately $221 billion.

Negotiations between Marvell and Lumentum highlight a surge in M&A activity amid the growth of AI: investors are betting on the technology’s enormous growth potential, according to Bloomberg.

Lumentum, which raised $2 billion from Nvidia earlier this year, manufactures lasers and other optical equipment for transmitting massive amounts of data at high speeds. This infrastructure is at the heart of the AI boom, as it enables data centers and telecommunications companies to transmit information between servers and sites. Marvell manufactures semiconductors and sources lasers from Lumentum, so the deal could streamline its supply chain. Both companies are headquartered in Northern California.

Amid news of the negotiations, Marvell's stock fell more than 8% in after-hours trading. Lumentum's stock rose 17%.

Both companies have benefited from the AI investment boom: Lumentum’s stock has risen by more than 350% this year, while Marvell’s has risen by 180%. Nevertheless, not a single Wall Street analyst is advising investors to take profits. According to MarketWatch, 85% of analysts recommend buying Lumentum stock, while more than 90% of analysts are bullish on Marvell.

This article was AI-translated and verified by a human editor