Investor interest in Lumentum Holdings intensified on Wednesday stateside as the company’s shares climbed almost 9% in extended trading after reports emerged that Marvell Technology is progressing toward acquiring the data-center optics manufacturer, according to Bloomberg, citing sources familiar with the matter.
Lumentum’s optical components are widely used in both communications infrastructure and data centers, sectors experiencing heightened demand for high-speed transmission technologies as artificial intelligence workloads accelerate.
Notably, Marvell’s stock dropped by over 8% after hours following the news.
Marvell, which provides semiconductors and networking solutions tailored for AI and cloud data environments, has seen its share value rise around 180% year-to-date, benefiting from a surge in AI-related spending. The company elevated its revenue outlook for fiscal 2028 to $20 billion from $15 billion, citing robust demand for its AI chips and networking products utilized in data center operations.
The anticipated acquisition of Lumentum aligns with Marvell’s ongoing strategy to expand its presence in optical technology. This strategy was highlighted by the $3.25 billion purchase of photonics firm Celestial AI, announced late last year.
Bernstein analysts have noted that integrating a deal of Lumentum’s size could bring operational and financial challenges, especially as Marvell’s most recent quarterly filing showed $3.92 billion in cash and cash equivalents.
A formal announcement regarding the acquisition could arrive as early as next week, according to sources. However, negotiations continue, and the final terms remain subject to change. Lumentum’s market capitalization stood at about $83 billion, while Marvell was valued at around $221 billion.
Lumentum’s leadership has previously indicated that demand for its advanced indium-phosphide technology is so strong that certain products are effectively sold out through 2029.
