Lumentum Holdings shares gained as much as 17% during after-hours trading following reports that Marvell Technology was in advanced negotiations to acquire the optical components manufacturer. Marvell shares fell following the reports. People familiar with the matter said the companies could announce a transaction as early as next week. The companies have not reached a final agreement, and the terms or schedule could change. Representatives of both companies were unavailable for immediate comment.
Lumentum has a market value of approximately $83 billion. Benzinga Pro data put Marvell's valuation at around $221 billion. Benzinga Pro market data showed Marvell shares trading 8.37% lower at $230.59 during Wednesday's after-hours session. The same data showed Lumentum shares gaining 8.54% to $991.99.
Lumentum produces lasers and other optical components that transmit large volumes of data at high speeds. Data centers and telecommunications carriers use the equipment to transfer information between servers and facilities, making the hardware important to AI infrastructure expansion. Marvell already purchases lasers from Lumentum. An acquisition could simplify Marvell's supply chain by bringing the supplier into the company. Both companies have headquarters in Northern California.
Nvidia also has close connections with Lumentum. In March, Nvidia agreed to invest $2 billion each in Lumentum and Coherent to enhance Nvidia's data center chips with technology supporting faster AI processing. The partnerships included Nvidia commitments to make multibillion-dollar purchases, alongside rights to future capacity and access to advanced lasers and optical networking products. Lumentum CEO Michael Hurlston said at the time that Lumentum would build a new fabrication facility to increase capacity.
Marvell has made acquisitions a central element of Marvell's AI strategy. Last year, Marvell agreed to acquire semiconductor startup Celestial AI for $3.25 billion to obtain access to Celestial AI's photonics technology. The technology establishes connections using light rather than electrical signals.
Marvell has also strengthened ties with hyperscalers. Marvell shares gained nearly 10% in August after a securities filing revealed that Alphabet could purchase up to $12.2 billion of Marvell stock through the companies' custom-chip partnership. The arrangement specified a price of $206.58 per share and linked the stake to purchasing targets through fiscal 2033.
The acquisition discussions reflect a wider increase in AI-related transactions. Investors continue to bet on the technology's long-term growth, with chip, networking equipment and optical component suppliers central to AI spending.
Lumentum Shares Jump 17% Amid Marvell Takeover Rumors
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Summary
Lumentum Holdings shares rose 17% in after-hours trading as Marvell Technology takeover rumors spread. Trading volume spiked sharply amid the speculation. The fear and greed index showed mixed signals as investors reacted. Marvell shares dropped 8.37% in the same session. A deal could bring Lumentum’s optical components in-house, cutting supply chain costs. Both firms are based in Northern California. Lumentum is valued at $83 billion, Marvell at $221 billion. No official confirmation has been issued.
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