Marvell set to join S&P 500 as AI-driven growth boosts profitability

Marvell Technologies is set to join the benchmark S&P 500-a major milestone announced on Friday after the chipmaker cleared prominent profitability hurdles to fully capitalize on the AI-driven market surge.

The company is set to replace swimming pool equipment distributor PoolCorp on the stock market benchmark before the start of trading on June 22. It has been observed that Marvell shares soared nearly 6% in extended trading.

Marvell Technology's shares reportedly surged 23% in premarket on Tuesday after Nvidia’s Jensen Huang called the chipmaker the next “trillion-dollar company. 

According to Marvell last week's forecast, its custom chips business will exceed expectations to reach $10 billion in revenue by fiscal 2029, fueled by cloud companies upgrading their AI data centers.

Marvell shares were up 23% at $269.93 adding more than $44.6 billion in market capitalization.

Notably, the AI boom has triggered a surge in demand for specialized chips, positioning Marvell’s interconnected technologies to play a significant role in advanced data centres by linking thousands of processors to run complex AI models.

Marvell shares have surged significantly so far this year, fueled by a widespread market rally in chip stocks on hopes for strong AI-related demand.

Its integration in the S & P 500 demonstrated that the AI boom is restructuring major US equity benchmarks with chip and data-center infrastructure companies, taking on larger weights as investors bank on enduring consumption from cloud providers and AI workloads.

The significant move would drive buying from index funds that track the S&P 500 as index managers are required to hold constituents in line with their index weightings.