Marvell Technology announced on Monday its plan to acquire optical components maker Lumentum in an all-stock deal, marking a significant bet on the growing demand for AI connectivity. The acquisition aims to address the increasing needs of AI infrastructure, which is shifting toward optical connectivity. Marvell Chairman and CEO Matt Murphy described this transition as a once-in-a-generation opportunity, emphasizing that early movers will set the standard for decades.
The transaction, expected to close in the first half of 2028, has an implied enterprise value of $115 billion for Lumentum. Under the agreement, Lumentum shareholders will receive 4.5 Marvell shares for each Lumentum share. The deal combines Marvell's electrical and optical technologies to meet the evolving AI connectivity demands across different regions and systems.
Marvell's acquisition of Lumentum follows its earlier deal this year to acquire Celestial AI, a startup focused on optical interconnectivity technology. The company's market value has more than tripled over the last three years, driven by strong AI enthusiasm. Despite recent concerns over the long-term sustainability of infrastructure spending, Marvell's takeover represents one of the most significant bets on AI in 2026.
Before the bell, Marvell shares slumped 3%, while Lumentum's stock declined about 4%. Both companies have seen substantial stock growth, with Lumentum's stock more than doubling in 2026 alone.