Marvell Technology shares fell 11% after Bloomberg reported the chipmaker is in advanced talks to acquire Lumentum, potentially in an all-stock transaction, according to Benzinga.
No final price or timetable has been confirmed, and Lumentum's stock jumped about 13% after hours as investors priced in an acquisition premium.
Lumentum makes laser technology used in high-speed data-center optical links, a complement to Marvell's existing optical digital-signal-processor business, which processes data inside optical transceivers.
BNP Paribas estimates Marvell's DSPs and Lumentum's lasers together account for about 75% of the bill of materials in a typical PAM4 optical transceiver, a combination the bank says could hand Marvell greater control over a key AI-networking subsystem.
The bank frames Broadcom as the benchmark for this strategy, since it already pairs switching silicon with an in-house laser portfolio.
Broadcom has separately told investors it expects its AI-semiconductor revenue to exceed $100 billion, with chief executive Hock Tan targeting $115 billion in fiscal 2027 and $230 billion the year after.
BNP Paribas expects the data-center optical-transceiver market to grow from roughly $35 billion in 2026 to $91 billion by 2030, and projects that a completed deal could lift Marvell to about $28 billion of calendar-2027 revenue.
The gap between Marvell's slide and Lumentum's gain suggests markets see Marvell shareholders bearing much of the deal's dilution and execution risk.
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