On November 3, TD Cowen downgraded Marvell Technology to Hold from Buy and cut its price target to $175 from $350. According to Sina Finance, TD Cowen said Marvell’s acquisition of optical communications equipment maker Lumentum could dilute future earnings, and that the deal may come near a cyclical peak for the AI optical communications industry, increasing its risk. Marvell shares closed at $171.41 on Monday, down 12.72% for the day and 29.6% over the week. TD Cowen analyst Sean O’Loughlin estimated that the all-stock acquisition could dilute Marvell’s 2028 calendar-year earnings per share by about 4% to 6%; Marvell management had said the deal was expected to begin adding to earnings per share one year after completion. TD Cowen also questioned whether the companies needed to merge to achieve co-design and performance optimization for optical communications products. The firm said the market may be overestimating future demand for optical transceiver modules: bottom-up market forecasts imply a market size of $100 billion in 2027, while its estimate based on AI chip shipments is $47 billion. If the industry enters a downturn in 2028 because of excess optical transceiver module capacity, Lumentum’s higher operating leverage could magnify margin declines and further increase the deal’s dilutive effect on Marvell’s earnings.