Marvell Falls 7.8% After Hours Amid Advanced Talks to Buy Lumentum
Key Facts
Marvell Technology shares fell 7.8% in extended trading after Wednesday’s close after Reuters reported the company was in advanced talks to buy Lumentum Holdings, a maker of optical communications components for data centers. Reuters said a deal could be announced the following week, while neither company immediately responded to requests for comment. Marvell shares rose in the daily sessions shown in EL7 data, closing at $251.65 on October 28, compared with $223.47 on October 22. The after-hours loss therefore followed a rise in the regular-session close over the period shown. In premarket trading on Thursday, Marvell shares fell 9.4%, while Lumentum shares rose 4.3%, according to Reuters.
Lumentum has a market value of about $83 billion, according to Investing.com, a figure that describes the company’s market capitalization and does not represent an announced acquisition price. Reports have not disclosed an agreed deal value or its financing terms. The talks highlight the scale of financing an acquisition of this size could require, at a time when Marvell had about $3.92 billion in cash and cash equivalents in its latest reported quarter before October 29, according to Reuters. That cash balance puts financing among the considerations markets may follow if the talks advance. An announcement of an agreement was also not certain; Reuters reported it could be announced the following week. Neither company immediately commented on Reuters’ requests.
The talks follow Marvell’s October increase of its fiscal 2028 revenue forecast to $20 billion from $15 billion, citing strong demand for its custom artificial intelligence chips and networking products used in data centers, according to Reuters. The forecast reflects the company’s bet on continued demand tied to AI infrastructure. An investment official told Reuters that investors had begun scrutinizing how long it would take to turn AI investments into revenue compared with capital spending rates. That scrutiny puts companies’ expansion in data centers and chips to the test on the financial returns and their timing. In this context, a potential Lumentum deal intersects with Marvell’s data center products business, but reports have not yet specified how it would be financed or whether it would be completed. As of October 29, the purchase talks remained at the advanced-negotiation stage reported by Reuters.
Meanwhile, Alphabet’s results came in below analysts’ average estimates for revenue and earnings per share in the third quarter. Revenue was $127.58 billion, against estimates of $127.97 billion, while the company reported earnings per share of $2.12, compared with estimates of about $3.01, according to AP. Revenue rose 25% from the same period a year earlier, but that growth did not prevent a miss against expectations. Net income was $26.17 billion in the July-to-September period, down from $34.98 billion in the same period a year earlier. Alphabet shares, listed under the ticker GOOGL, closed at $324.89 on October 28, according to EL7 data. After Wednesday’s close, the stock fell more than 10% to $289.95 in extended trading, according to AP.
Alphabet’s results included an $8.7 billion loss on equity investments, which reduced earnings per share by 55 cents, according to AP. Meanwhile, Google Cloud revenue rose 103% year over year to $30.7 billion, driven by growth in infrastructure, enterprise AI solutions and core GCP services. Google Search and other advertising grew 12% to $63.3 billion, while YouTube advertising revenue rose 9% to $11.2 billion. AP noted that growth in Search revenue and YouTube advertising came in below some analysts’ expectations. The figures show divergent performance across the company’s businesses during the quarter: strong growth in cloud alongside advertising revenue below some estimates. But the investment loss and decline in net income accompanied results that missed earnings-per-share estimates.
On capital spending, Alphabet Chief Financial Officer Anat Ashkenazi said the company expects “capital expenditures to continue to increase significantly” in 2027, with more details to be provided on the fourth-quarter earnings call. The spending outlook comes as investors focus on when AI investments will translate into revenue, according to an investment official quoted by Reuters. Intel and Amazon are scheduled to report results after markets close on Thursday, as markets track the returns on heavy AI spending, Reuters reported. As for Marvell and Lumentum, Reuters said a deal could be announced the following week, and neither company immediately responded to requests for comment. The report did not include an agreed price for Lumentum or details on financing the potential deal. Attention remained on developments in the talks and on Alphabet’s capital expenditure disclosures during its fourth-quarter call.