Marvell deal for Lumentum won't be at a big premium - CNBC

Applied Optoelectronics (AAOI) fell 15% to $67.40, Coherent (COHR) dropped 13% to $206.43, Lumentum (LITE) declined 10% to $824.82, and Marvell (MRVL) sank 10% to $197.50 due to concerns over hyperscaler spending. Google's (GOOGL) negative $9.1B free cash flow report exacerbated fears. All four companies supply AI data center components, with demand outpacing supply. AAOI is up 93% YTD, LITE 124%, and MRVL 133%. A potential merger between LITE and MRVL is also under discussion.

Broadcom (AVGO) shares fell 5% to $327.49 despite a DA Davidson upgrade and $400 price target. The firm expects Anthropic's IPO and OpenAI's potential listing to benefit Broadcom, citing its $16.7B AI revenue in Q3. Arm (ARM) dropped 10%, Qualcomm (QCOM) 10%, and Marvell (MRVL) 8% amid broader chip sector declines.

Rosenblatt reiterated a Buy rating and $300 price target for Marvell (MRVL), citing its M&A strategy and potential $100B acquisition. Lumentum (LITE) shares rose 0.6% amid talks of a deal, with Rosenblatt raising its target to $1,300. Marvell's stock has surged 360% in a year, but is seen as overvalued.

Marvell Technology (MRVL) is in advanced talks to acquire Lumentum Holdings (LITE) in an all-stock deal, according to Bloomberg. The deal could be announced next week but may not materialize. Marvell is valued at $196bn, while Lumentum, backed by Nvidia (NVDA), has a market value of about $85bn. The acquisition would enhance Marvell's control over optical technology for AI data centers.

Rosenblatt raised its price target for Lumentum (LITE) to $1,300, citing potential acquisition by Marvell (MRVL). LITE shares are up 22% this week. Rosenblatt believes a deal is likely, with LITE shareholders receiving cash and equity. The combined entity would compete with Broadcom (AVGO) and supply AI interconnects. LITE reports earnings on November 5, with options data suggesting a 9% potential move. MRVL has Overweight and Buy ratings from Piper Sandler and Stifel.

Marvell (MRVL) is in advanced talks to acquire Lumentum in an all-stock deal valued at ~$83B, with shares reacting accordingly. Alphabet may buy up to $12.2B of Marvell shares tied to a custom-chip deal. Analysts note potential synergies but also short-term margin pressure. Officials highlight financial and integration risks.