Lumentum Holdings Inc. (NASDAQ:LITE) shares are continuing to trade higher Thursday after a report from late Wednesday said that Marvell Technology Inc. (NASDAQ:MRVL) is in advanced talks to acquire the optical components maker.
- Lumentum stock is showing positive momentum. What’s the outlook for LITE shares?
Marvell Reportedly in Advanced Talks to Acquire Lumentum, Deal Possible Next Week
Lumentum shares jumped as much as 17% in after-hours trading Wednesday after the report, and Marvell shares fell. A deal could be announced as soon as next week, according to people familiar with the matter. No final agreement has been reached, and the terms or timing could change. Representatives for both companies weren’t immediately available for comment. Lumentum has a market value of about $83 billion, and Marvell about $221 billion, according to Benzinga Pro. Bernstein analysts said a deal of this size probably couldn’t be funded entirely in cash, according to Reuters.
Why Lumentum Matters to Marvell
Lumentum makes lasers and other optical components that move large amounts of data at high speed between servers and data center facilities, a core building block of the AI buildout. Marvell already buys lasers from Lumentum, so bringing the supplier in-house could simplify its supply chain. Lumentum’s CEO, Michael Hurlston, said earlier this month that its optoelectronic components are effectively sold out through early 2029. Both companies are based in Northern California.
Marvell Expands AI Optics Footprint Amid Nvidia’s Lumentum Backing
In March, Nvidia Corporation (NASDAQ:NVDA) agreed to invest $2 billion each in Lumentum and Coherent Corp. (NYSE:COHR), along with multibillion-dollar purchase commitments and access to future capacity for advanced laser and optical networking products. Acquisitions are central to Marvell’s AI strategy. It agreed last year to buy Celestial AI for $3.25 billion to gain photonics technology, and in August, a filing showed Alphabet Inc. (NASDAQ:GOOGL) could buy up to $12.2 billion of Marvell shares at $206.58 each under their custom-chip partnership. The talks reflect a broader wave of AI-related dealmaking, with suppliers of chips, networking gear and optics at the center of the spending.
Lumentum Shares Edge Higher
LITE Price Action: At the time of publication, Lumentum shares are trading 6.13% higher at $969.98, according to data from Benzinga Pro.
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