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Marvell Technology Inc. (NASDAQ:MRVL) shares are falling Thursday after a report said the chipmaker is far along in negotiations to acquire Lumentum, a maker of optical parts for AI data centers.

• Marvell Technology stock is among today’s weakest performers. What’s weighing on MRVL shares?

Marvell Stock Falls On Lumentum Takeover Report

Bloomberg reported that Marvell is negotiating a takeover of Lumentum Holdings Inc. (NASDAQ:LITE), and Marvell shares are sliding Thursday. People briefed on the talks said Marvell would pay entirely with its own shares, and an announcement could come as early as next week. They requested anonymity since the discussions are confidential.

Nothing is settled. Both the outcome and the schedule remain open, the sources cautioned, and negotiations could end without a deal. It put Lumentum’s market value near $85 billion and Marvell’s near $196 billion, and the terms were not known. A deal would rank among the biggest transactions the technology industry has seen.

Why Lumentum Matters to Marvell

Lumentum supplies the lasers behind fast optical links. As AI data centers pack in more processors, connections between chips and servers increasingly run on light rather than copper. Supply is already short.

Earlier in October, Lumentum CEO Michael Hurlston said every optical part the company can make is already spoken for until early 2029. About 70% of customer demand for certain products will go unmet next year, he said.

Marvell makes chips and is already a Lumentum customer for lasers. Buying the supplier would give Marvell its own source of a scarce part and the factory capacity behind it, both of which are turning into chokepoints as AI infrastructure expands.

MRVL Shares Are Tumbling

MRVL Price Action: Marvell shares were down 13.92% at $216.64 at the time of publication on Thursday, according to Benzinga Pro.

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