Marvell to join S&P 500 after AI boom helps chipmaker pass profitability test

Marvell Technology is set to join the benchmark S&P 500 index before the start of trading on June 22. The chipmaker will replace PoolCorp, a distributor of swimming pool equipment.

The announcement led to a nearly 6% jump in Marvell shares during extended trading. This inclusion follows the company’s success in clearing a key profitability hurdle.

Profitability and the AI Surge

Marvell secured its position after reporting a GAAP profit for the three months ending in December, as well as for the sum of its most recent four quarters. These results overcame a barrier that had previously prevented the company from entering the index.

Jensen Huang

The company’s stock has more than tripled so far this year, fueled by a broader rally in chip stocks. This growth is driven by expectations for robust AI-related demand.

Did You Know? Marvell has forecast that its custom chip business will surpass $10 billion in revenue by fiscal 2029.

This week alone, Marvell’s shares gained roughly 29%. This spike occurred partly after Nvidia CEO Jensen Huang referred to the chipmaker as the “next trillion dollar company.” As of Friday’s close, Marvell’s market value was $276.81 billion.

Strategic Positioning in Data centres

Marvell and its larger rival, Broadcom, design custom chips for the specific data-center requirements of cloud-computing firms. This business has grown rapidly as Big Tech attempts to reduce its reliance on Nvidia’s supply-constrained and costly AI processors.

Expert Insight: Samantha Carter suggests that Marvell’s inclusion reflects a broader reshaping of U.S. Equity benchmarks. As investors bet on sustained demand for AI workloads, chip and data-center infrastructure companies are likely to command increasingly larger weights within these indices.

Future Market Impact

The inclusion in the S&P 500 could trigger increased buying from ETFs and index funds. Passive managers are required to hold constituents in accordance with their benchmark weights.

Marvell Technology: The Silent Giant Powering The 2026 Optical Interconnect Explosion

In a separate move, the index will also add contract manufacturer Flex, which will replace the packaged food company Campbell’s.

Frequently Asked Questions

Which company is Marvell Technology replacing in the S&P 500?
Marvell will replace the swimming pool equipment distributor PoolCorp.

What financial milestone allowed Marvell to join the index?
The company reported a GAAP profit in the three months through December and over the sum of its most recent four quarters.

What other company is being added to the benchmark index?
Contract manufacturer Flex will also be added to the index, replacing Campbell’s.

How do you think the shift toward custom AI chips will impact the long-term balance of power among semiconductor companies?