B.Riley lowers Marvell stock price target on acquisition concerns

B.Riley has reduced its price target on Marvell Technology stock (NASDAQ: MRVL) to $275 from $365, maintaining an overall Buy rating. The firm's concerns stem from the pending Lumentum acquisition, citing potential dilution and integration risks. Despite recent volatility, Lumentum shares have experienced a significant surge of 317% over the past year, though they are currently trading slightly above the platform's Fair Value estimate.

Marvell shares, however, have experienced a notable decline of nearly 7% following a steep drop in the previous week. According to B.Riley's calendar estimates for 2027 and 2028, Marvell's stock currently trades at 24 times and 13 times the expected earnings per share, respectively. Analysts project that the Lumentum acquisition will continue to be a focal point of investor concerns in the upcoming quarters.

B.Riley asserts that Marvell is well-positioned to capture a larger share of AI spending through expanding XPU programs, a growing XPU-attach funnel, and interconnect growth across various domains. The potential acquisition of Lumentum by Marvell has generated significant interest among analysts, with Rosenblatt raising its price target to $1,300, citing strategic advantages in AI interconnects if the deal is finalized.

However, B.Riley has named Lumentum as its top AI optics pick, maintaining a Buy rating and highlighting the company's sold-out capacity through 2029. Marvell Technology has also been recognized for its merger and acquisition strategy, with Rosenblatt maintaining a Buy rating and a $300 price target, emphasizing the company's ability to generate value through scale and intellectual property monetization.

The stock's recent fluctuations, amid acquisition discussions, have led Piper Sandler to assign an Overweight rating with a $400 price target. These developments underscore the significant interest and strategic positioning in the AI and semiconductor sectors for both Marvell and Lumentum.