Marvell in advanced talks to buy Lumentum; stock falls 8%

Marvell's reported move on Lumentum fits a broader pattern in its portfolio. The company specializes in custom application-specific integrated circuits, or ASICs, tailored to specific workloads, and its lineup also includes optical digital signal processors, Ethernet switches, high-speed interconnects, and silicon photonics. Those components help move data between large clusters of GPUs and memory, a task where copper-based connections run into limits around bandwidth, distance, and power consumption, while optical interconnects offer an alternative.

Lumentum specializes in lasers and optical components that support such systems. Integrating that technology with Marvell's networking and custom silicon could let it offer customers a more comprehensive suite of AI infrastructure solutions. The deal would also build on Marvell's purchase of Celestial AI, a photonics company specializing in optical connectivity, potentially positioning Marvell as a supplier across multiple layers of the AI infrastructure stack.

The report comes alongside existing signals of confidence from Nvidia. During the Computex conference in June, Nvidia CEO Jensen Huang called Marvell the next potential trillion-dollar company, and Nvidia has invested $2 billion in Marvell. Marvell generated $8.2 billion in revenue during fiscal 2026, and management's fiscal 2031 revenue forecast at the midpoint of $80 billion would represent a tenfold increase over that figure in five years. The company believes this growth could support roughly $30 in adjusted earnings per share by fiscal 2031.