Marvell falls about 12% on reports it is in advanced talks to buy Lumentum, an optical-chip maker worth about $83 billion

Marvell Technology (MRVL) fell about 12% on Thursday, trading near $221.76 at midday against a prior close of $251.65, after Bloomberg News reported late Wednesday that the chipmaker is in advanced talks to acquire Lumentum (LITE). Reuters, citing a person familiar with the matter, said a deal could be announced as soon as next week. Neither company has confirmed the talks.

Why it matters: Lumentum makes lasers and optical parts that move data between AI chips, a fast-growing piece of data-center spending. A deal would deepen Marvell’s push into optics after its roughly $3.25 billion purchase of Celestial AI. Bernstein said a target of this size would likely require extra financing, and Piper Sandler said it would need a large equity and debt package, which helps explain why the buyer’s stock is falling.

Market reaction: Investors are weighing possible share dilution and debt against the strategic fit. Piper Sandler kept its Overweight rating on Marvell. The drop came on a day when the Nasdaq was down about 1.3% on Alphabet’s slide.

Next: Any official announcement and terms (cash, stock or both), financing plans, and regulatory approvals, which reports say would include US and Chinese reviews.