Key Takeaways
- Lumentum fell 15% today as the AI selloff deepened.
- Marvell is paying for Lumentum in stock with no price protection, so Lumentum trades on Marvell’s shares.
- Other optical stocks fell about as hard with no deal behind them.
- Until the deal closes in 2028, Marvell’s stock matters more to Lumentum holders than its sold-out business.
Lumentum (LITE) fell 15% today as Marvell, which is buying it with stock, slid on the AI selloff’s second day.
Lumentum moves with Marvell now
Marvell agreed Monday to pay 4.5 shares for each Lumentum share. At Marvell’s price before talks were reported, that was worth about $1,132. There’s no collar, so Marvell’s losses come straight out of the offer.
By Wednesday’s close, Marvell was down 37% from that price, so the offer was worth $719. Lumentum closed 13% below even that. Marvell fell another 15% today.
Lumentum’s CEO said in October that its parts are effectively sold out through early 2029. Analysts see normalized EPS more than quadrupling from fiscal 2026 to fiscal 2028:
On those estimates, the forward P/E was 26x before today. That’s under its 30x five-year average:
At today’s price, it’s even lower. But until the deal closes, Lumentum’s stock follows Marvell’s.
No deal to blame at Ciena or Credo
Ciena (CIEN) fell 13% and Credo Technology (CRDO) fell 16% with no deal of their own. Ciena’s fiscal third-quarter revenue rose 37% to $1.67 billion, and it raised its full-year guide to $6.42 billion. Credo’s growth rides on copper cables, links a shift to fiber would replace. It guided to fiscal second-quarter revenue of $525 million to $535 million, up from $479.0 million.
Both report in early December. With copper and fiber names down together, I’d say investors are cutting AI connectivity across the board, strong quarters or not.
TIKR tracks 26 analysts on Lumentum. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Lumentum, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Lumentum’s Analyst Ratings
Power and chip equipment fell too
Bloom Energy (BE) fell 18% even after announcing a 900-megawatt deal with NTT DATA this morning. A day earlier, Bloom dropped as AI power stocks faded on the election.
Applied Materials (AMAT) had no news of its own and fell 11%. Qualcomm’s weak guidance and Arm’s royalty miss hit chip stocks overnight.
Lumentum is a Marvell bet until 2028
Buying Lumentum today means buying Marvell shares at a discount, plus a bet that the deal closes. If Marvell keeps sliding, Lumentum’s sold-out business won’t save the stock.
Of course, Marvell reports in early December, and the deal still needs shareholder and regulatory approval before its expected close in the first half of 2028.
So what is Lumentum stock actually worth if the deal doesn’t go through?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Lumentum could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
