Why Marvell Technology Plunged Today

Marvell Technology announced an all-stock acquisition of optical laser leader Lumentum for approximately $115 billion at a 24% premium. The deal aims to combine Marvell's digital signal processors with Lumentum's indium phosphide laser technology for next-gen AI systems. However, investors reacted negatively, with Marvell shares plunging 10% due to concerns about overpaying at the top of the market, despite the long-term AI growth story remaining intact.