Marvell's $115 billion all-stock Lumentum deal lands as AI trade wobbles

Marvell Technology agreed to buy Lumentum Holdings in an all-stock deal valued at $115 billion, or $1,132 per Lumentum share, a 24% premium to Wednesday's close. The market punished the deal: Marvell fell 9.3% Monday to $178.14, while Lumentum dropped 15% to $712.32, making it the worst S&P 500 performer and its largest daily percentage decline since April 3, 2025. The acquisition is a bet on AI-driven optical networking, but it lands as investors grow skeptical of AI infrastructure spending. The Nasdaq fell 5.3% last month, its worst month since March 2025. Analysts are divided: Morgan Stanley questions buying at potentially peak cyclical conditions, while Citi expects AI spending to keep accelerating. Marvell makes digital signal processors in optical transceivers; Lumentum produces lasers and components. The combined company sees a $550 billion addressable market. Data-center oppositi