Tech Giants Tumble: Are Marvell and ServiceNow Undervalued?

On October 29, 2026, Marvell Technology (MRVL) shares declined approximately 13% to $218.34. This drop followed a report that the chipmaker was in advanced discussions to acquire optical parts maker Lumentum Holdings (LITE).

ServiceNow (NOW) experienced an even more significant downturn, losing about 27% of its value to close at $109.67. This decline was attributed to its third-quarter financial results.

As of the current date, neither stock has recovered from these substantial losses. Marvell's stock is currently trading around $171, and ServiceNow's around $102, both approximately 32% below their closing prices on October 28, 2026.

However, the article suggests that these price corrections do not stem from reduced long-term plans for either company. Both Marvell and ServiceNow have set ambitious targets for around 2030, leading the author to believe that their current stock prices are attractive.

Marvell's acquisition of Lumentum was officially announced on November 2, 2026. The deal values Lumentum at approximately $115 billion, including debt, and involves a stock exchange where Lumentum shareholders will receive 4.5 Marvell shares for each Lumentum share. Current Marvell shareholders will retain about 67% of the combined entity, with the share count increasing by roughly half due to the deal, which investors apparently reacted to negatively. Management anticipates the acquisition will boost non-GAAP earnings per share from the first year after closing and generate over $1 billion in annual cost savings. The transaction is expected to finalize in the first half of 2028.

Prior to the Lumentum deal, Marvell had already outlined substantial growth projections. The company projected its revenue to climb from $8.2 billion in fiscal 2026 to approximately $20 billion in fiscal 2027. Its revenue target for fiscal 2031 is between $70 billion and $90 billion, with an adjusted earnings per share goal exceeding $30 for that year. At its current price of $171, Marvell stock is valued at under six times its targeted earnings for 2031.

ServiceNow's third quarter itself showed robust performance, with subscription revenue increasing by 21% year-over-year to about $3.99 billion and free cash flow rising by approximately 39% to $822 million. The significant stock sell-off was triggered by a forecast for fourth-quarter growth in current remaining performance obligations (cRPO) of 18.5%, a decrease from the 21% reported in the third quarter. Management attributed this to factors such as early renewals being pulled into the third quarter and an increase in on-premise deals with public sector clients.

Despite the slight deceleration in cRPO growth, revenue guidance remains positive, with subscription revenue growth projected at 21.5% for the fourth quarter. ServiceNow has targeted over $30 billion in subscription revenue by 2030, nearly double its 2026 guidance of approximately $15.8 billion. At a projected free cash flow margin of 36%, this could translate to around $11 billion in free cash flow, with the company's market value of about $105 billion representing roughly 10 times that projected free cash flow.

Both companies are positioned to benefit from the growth of artificial intelligence (AI). Marvell supplies the chips for AI data centers, and Lumentum would add optical components. ServiceNow offers software solutions that enable businesses to deploy and manage AI agents, having increased its target for annual AI contract value to $1.7 billion by 2026. While both companies face risks, including potential slowdowns in AI spending or cannibalization of existing services by AI, their long-term targets suggest current stock prices are appealing for buy-and-hold investors. Marvell's stock is expected to exhibit significant volatility until its acquisition deal closes.