Marvell's Potential Lumentum Deal Sends LITE Surging, MRVL Sliding After-Hours

(MENAFN- AsiaNet News)

• A final deal hasn't been reached, and details could change, the report said. 
• After Wednesday's market close, Lumentum has a market value of about $83 billion, while Marvell is valued near $221 billion.
• A potential combination would give Marvell access to scarce, high-performance optical components which can help ease bottlenecks in AI clusters.

Shares of Lumentum Holdings Inc (LITE) soared 10% after hours on Wednesday following a report that Marvell Technology is in talks to buy it in a potential megadeal.

A deal between Marvell and the data center optics maker could be announced as soon as next week, Bloomberg reported, citing unnamed people familiar with the matter. A final deal hasn't been reached, and details could change, the report said.

After Wednesday's market close, Lumentum has a market value of about $83 billion, while Marvell is valued near $221 billion. Shares of MRVL tumbled 8% following the report.

What Do Marvell And Lumentum Do?

Marvell is a fabless semiconductor designer focused on data-infrastructure solutions, while Lumentum makes optical and photonic products such as lasers, optical components, and networking systems used in cloud and AI data centers. Lumentum's indium-phosphide technology is particularly in high demand; CEO Michael Hurlston has previously said that the company is essentially sold out of certain products into 2029 and is under-shipping demand by substantial margins due to the fast-paced nature of AI data center buildouts.

Marvell, too, is strengthening its position in  the AI space, recently inking a partnership with Google on custom chips. The company also completed acquiring Celestial AI, specialized in photonic interconnect technology to remove data bottlenecks in AI data centers, earlier this year.  

A potential combination would give Marvell access to scarce, high-performance optical components which can help ease bottlenecks in AI clusters by replacing copper interconnects which are more limited in capacity.

How Did LITE, MRVL Retail Traders React?

On Stocktwits, retail sentiment around LITE stock jumped from bearish to bullish territory over the past 24 hours, while message volume increased from 'normal' to 'high' levels.

Meanwhile, sentiment around MRVL stayed at 'bearish' levels, accompanied by 'normal' retail chatter.

A Stocktwits user voiced optimism for the deal, highlighting that Lumentum is also a successful company and opined that MRVL bears are misjudging the potential deal.

View this Stocktwits post

Another user opined that investors should short Marvell and buy Lumentum if the deal materializes.

View this Stocktwits post

While LITE stock has gained 148% year-to-date, MRVL has added about 196%. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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