Marvell's stock plunges amid election fallout and looming merger concerns

Marvell Technology dropped 7% following the Democratic sweep in the U.S. midterm elections, with investors reacting to potential regulatory risks for data-center expansion. The decline was amplified by the company’s $115 billion all-stock acquisition of Lumentum, which has already pressured its share price. While broader AI infrastructure stocks like Broadcom held steady, Marvell’s valuation remains under strain despite strong long-term earnings projections.

Marvell Technology’s stock dropped 7% following the U.S. midterm elections, in which Democrats secured control of both chambers of Congress and key governorships in data-center hubs like Texas and Georgia. The decline came amid growing investor concern over potential regulatory hurdles to data-center expansion, particularly as Democratic candidates campaigned on stricter environmental and zoning policies for large-scale infrastructure projects. This political shift added fresh risk to Marvell’s already strained valuation, which has been pressured by its $115 billion all-stock acquisition of Lumentum announced on November 2, expected to close in early 2028. The deal is projected to increase Marvell’s share count by about half, a dynamic that historically depresses the acquiring company’s stock price—what Gary Black of The Future Fund described as “the acquirer’s stock is sold down.” By Monday, Marvell had already fallen 32% from its October 28 close, before the merger talks became public. While broader AI infrastructure stocks like Broadcom saw only a 2% dip and maintained strong revenue guidance—$21.7 billion in AI chip revenue projected for the October quarter—Marvell’s forward P/E of 30x is now below its five-year average of 33x, indicating that much of its AI premium has already been priced in. The company still projects $20 billion in fiscal 2028 revenue, but long-term growth assumptions rely on a 35% annual increase in data-center capital spending through 2030—vulnerable