Marvell Stock Falls 13.24% as Investors Weigh the Cost of a Possible Lumentum Takeover

Marvell Technology shares closed at $218.34 on Oct. 29, 2026, down 13.24%. Reports had surfaced that the chipmaker is in advanced talks to buy Lumentum Holdings, according to The Motley Fool.

Lumentum, which makes lasers and high-speed optical parts used in AI data centers, closed at $919.53, up 0.61%.

Neither company has disclosed terms. The Motley Fool described the deal as said to be all-stock. Marvell's drop came on trading volume of 40.4 million shares, about 87% above its three-month average of 21.6 million.

Buyer Down, Target Barely Up

24/7 Wall St. reported that Lumentum was up 6% to about $965 in morning trading. By the close, the gain had shrunk to 0.61%.

The outlet put Lumentum's market value at $82.8 billion, against Marvell's $220.7 billion. Even for a company of Marvell's size, the target is a large purchase.

Both stocks had run hard before the news. Marvell was up 159% for 2026 and Lumentum up 162%, 24/7 Wall St. said.

Dilution and Debt Are the Stated Concerns

Investors focused on financing and dilution risk, the Motley Fool said. Dilution means a company issues new shares, which shrinks each existing shareholder's ownership stake. In an all-stock deal, Marvell would pay with those shares.

24/7 Wall St. noted that Marvell already carries $4.963 billion of long-term debt. Absorbing a company of Lumentum's scale carries execution work of its own, it added.

The strategic logic is supply. Lumentum CEO Michael Hurlston has said the company is essentially sold out of certain products into 2029. It is shipping well short of demand, 24/7 Wall St. reported.

Owning that laser supply could strengthen Marvell's position in AI optics.

Optics Peers and the Broader Market

Rival optics names did not rise in sympathy. Coherent finished down 0.99% and Applied Optoelectronics fell 3.69%, according to 24/7 Wall St.'s quote data. A disclosed price could reset how buyers value scarce optical capacity across the group, the outlet said.

The S&P 500 closed at 7,720, down 0.31%, and the Nasdaq Composite finished at 26,185, down 1.38%. Broadcom closed at $345.00, down 1.94%, and Nvidia at $213.66, down 0.80%.

A day earlier, Oracle rose 10.73% to $144.54 after an investor day that set cash flow goals, as networth.com reported. Financing for AI spending is drawing scrutiny across the sector.

Marvell's Targets and Analyst Estimates

At its Oct. 6 investor day, Marvell raised its revenue outlook for fiscal 2028, which ends Jan. 31, 2028, to $20 billion. It also set a fiscal 2031 target of $70 billion to $90 billion in sales and earnings per share of $30 or more.

Fiscal 2026 diluted earnings were $3.07 per share, the Motley Fool said.

Zacks Investment Research said analysts expect Marvell's next quarterly report to show earnings of $1.10 per share on revenue of $3.16 billion, a 52.17% increase from the year-earlier quarter.

For the full fiscal year, the Zacks consensus calls for earnings of $4.21 per share and revenue of $12.05 billion.

Zacks put Marvell's PEG ratio at 5.43, against an industry average of 1.11. That ratio compares a stock's price-to-earnings multiple with its expected earnings growth. A higher number means investors are paying more for each unit of growth.

Zacks rates the stock #2 (Buy) on its own scale.

24/7 Wall St. said the open questions are whether Marvell and Lumentum announce a definitive agreement, and at what price and structure.