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

June 5 (Reuters) – Marvell Technology (MRVL.O), opens new tab is set to join the benchmark S&P 500 (.SPX), opens new tab later this month, S&P ​Dow Jones Indices said on Friday, after the chipmaker cleared a ‌key profitability hurdle riding an AI-fueled rally.

The company will replace swimming pool equipment distributor PoolCorp (POOL.O), opens new tab on the benchmark index before the start of trading on June 22. Marvell shares ​jumped nearly 6% in extended trading.

The inclusion comes after the company ​reported a GAAP profit in the three months through December ⁠and over the sum of its most recent four quarters, overcoming a ​key barrier that had previously kept it out.

Marvell’s shares have more than tripled ​so far this year, bolstered by a broader rally in chip stocks on hopes for robust AI-related demand.

This week alone its shares have gained roughly 29%, partly due to ​Nvidia (NVDA.O), opens new tab CEO Jensen Huang calling the chipmaker the “next trillion dollar company”. The ​company’s market value was $276.81 billion, as of Friday’s close.

Marvell and larger rival Broadcom (AVGO.O), opens new tab design custom ‌chips ⁠for cloud-computing companies’ specific data-center needs, a business that has grown rapidly as Big Tech looks to reduce reliance on Nvidia’s costly and supply-constrained AI processors.

In its most recent quarterly earnings, Marvell forecast its custom chip business would surpass $10 ​billion in revenue in ​fiscal 2029.

Its ⁠inclusion in S&P 500 reflects how the AI boom is reshaping major U.S. equity benchmarks, with chip and data-center ​infrastructure companies commanding increasingly large weights as investors bet on ​sustained demand ⁠from cloud providers and AI workloads.

The move would trigger buying from index funds and ETFs that track the S&P 500, as passive managers are required to ⁠hold ​constituents in line with their benchmark weights.

Separately, contract ​manufacturer Flex (FLEX.O), opens new tab will also be added to the index, replacing packaged food company Campbell’s (CPB.O), opens new tab.