MRVL Stock Hits Nearly 6-Month Low — Top Analyst Says Selloff Is ‘Aimed at the Wrong Thing’

Marvell hits a nearly six-month low after its $115B Lumentum deal, but Nicholas Mugalli says investors are focused on the wrong risks.

Marvell Technology Inc. (NASDAQ:MRVL) shares touched their lowest level in nearly six months Monday after its $115 billion agreement to acquire Lumentum Holdings Inc. (NASDAQ:LITE), but World Trade Securities CIO Nicholas Mugalli said investors are focusing on the wrong part of the transaction.

Mugalli Says Market Is Misreading The Deal

"The market hated it," Mugalli wrote in a Substack post, noting Marvell had fallen about 29% since reports of a potential deal emerged.

"We understand the reaction. We just think it’s aimed at the wrong thing," he said.

Marvell shares fell 12.72% Monday to close at $171.41 after touching $168.52, their lowest intraday level since May 12. The stock has declined for three consecutive sessions since closing at $251.65 on Oct. 28.

Mugalli said the rationale centers on the transition from copper connections toward optics as AI clusters demand greater bandwidth.

"After this deal, Marvell has every piece," he wrote, citing the combination of Marvell’s networking silicon with Lumentum’s lasers and optical technologies.

Mugalli described indium phosphide lasers as the "tightest bottleneck" in AI optics and pointed to Lumentum saying it is sold out through 2028. He also highlighted a second near- and co-packaged optics win that Lumentum expects could exceed $5 billion.

$MRVL is down 29% because it's buying $LITE for $115bn in stock. We think the market has it backwards.

After this deal Marvell owns every piece of that signal chain from the DSP to the laser. Only $AVGO can say the same.

Lumentum's indium phosphide lasers are the tightest… https://t.co/ufP5KnCaAM pic.twitter.com/gM1RSngQ6F
— Nicholas Mugalli (@RealNickMugalli) November 3, 2026

$550 Billion Market, But Risks Remain

Marvell said the all-stock transaction would expand the combined company’s addressable market to $550 billion and generate more than $1 billion in annual run-rate cost synergies. The companies expect the deal to close in the first half of 2028, subject to regulatory and shareholder approvals.

Mugalli acknowledged risks including Chinese regulatory approval, customers qualifying alternatives during the lengthy closing period and Marvell taking on Lumentum’s more capital-intensive manufacturing operations.

Still, he argued the stock decline has removed "far more value than any reasonable dissynergy scenario."

"The long-term logic only gets stronger as optics move into the package," Mugalli wrote, adding that he would "use the weakness to build a position."

How Have These Stocks Performed?

Stocks	1-Month	6-Months	YTD	1-Year	5-Years
MRVL	-36.81%	4.74%	101.71%	89.68%	138.53%
LITE	-37.31%	-29.89%	85.68%	242.92%	633.23%

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: Hryshchyshen Serhii / Shutterstock