Marvell Technology will be added to the prestigious S&P 500 index, according to an announcement Friday from S&P Dow Jones Indices, causing the semiconductor company’s stock to jump 6% in after-hours trading.
The chipmaker will officially become part of the benchmark index later this month after successfully meeting a crucial profitability requirement amid a surge driven by artificial intelligence demand.
Starting before trading opens on June 22, Marvell will take the place of PoolCorp, a distributor of swimming pool equipment, in the index.
The inclusion became possible after Marvell achieved GAAP profitability during its December quarter and across its last four quarters combined, a standard the company had previously been unable to reach, which had prevented its inclusion in the index.
Shares of the company have increased more than threefold this year, benefiting from widespread gains in semiconductor stocks as investors anticipate explosive growth in AI-related demand.
Just this week, the stock climbed approximately 29%, partially driven by comments from the CEO of Nvidia, Jensen Huang, who described the chipmaker as the “next trillion dollar company.”
Both Marvell and its bigger competitor Broadcom specialize in creating customized chips for cloud computing companies’ particular data center requirements, a sector that has expanded quickly as major technology firms seek alternatives to Nvidia’s expensive and hard-to-obtain AI processors.
During its latest quarterly earnings report, Marvell projected that its custom chip division would exceed $10 billion in revenue by fiscal 2029.
The addition demonstrates how the artificial intelligence surge is transforming major U.S. stock indices, with semiconductor and data center infrastructure firms gaining larger representation as investors anticipate continued demand from cloud service providers and AI applications.
Joining the benchmark index will automatically generate purchases from index funds and exchange-traded funds that mirror the S&P 500, since passive fund managers must maintain holdings that match their benchmark allocations.
