Marvell stock falls on Lumentum deal concerns, William Blair reiterates Outperform

Marvell Technology Inc.'s stock experienced a dip of nearly 7% as investors expressed concerns about the potential acquisition of Lumentum, according to William Blair analyst Sebastien Naji. The recent volatility stemmed from the perception of a larger portfolio under Lumentum, potential dilution, and integration risk, despite the stock's impressive 110% gain over the past year.

Marvell currently trades at 24 times the estimated earnings per share for 2027 and 13 times the 2028 estimate, and is carrying a P/E ratio of 60. William Blair maintains an Outperform rating on the stock, believing Marvell to be well-positioned to capture growth in AI spending through XPU programs, expanding XPU-attach funnel, and interconnect growth. The Lumentum acquisition is expected to be a focus of investor concerns in the coming quarters.