Marvell Technology Set to Enter the S&P 500 After Meeting Profitability Requirements

Marvell Technology is headed for the S&P 500. S&P Dow Jones Indices said June 5 that the chipmaker will be added to the benchmark before the open on June 22, replacing Pool Corp. Marvell shares climbed nearly 6% in after-hours trading after the announcement. S&P 500 inclusion is not just a size test; profitability is required. Companies must post positive GAAP earnings in the most recent quarter and positive cumulative GAAP earnings over the trailing four quarters. Marvell met both criteria, reporting a GAAP profit in fiscal Q4 (ended December) and positive results across the last four quarters. The company has benefited from demand tied to AI infrastructure and data centers, including custom silicon and networking chips used inside hyperscale facilities. Nvidia has invested $2 billion in Marvell, underscoring the company's role in the AI supply chain. In the same quarterly rebalance, Flex Ltd. will replace Campbell's in the index. The stakes extend beyond prestige: trillions of dollars in passive strategies track the S&P 500. Index funds, ETFs and target-date portfolios benchmarked to the gauge must buy Marvell shares once the change takes effect, and the move also lifts the technology sector's overall weight in the index. For investors, index eligibility is backward-looking. Marvell was added because it has already delivered profitability, not because it is expected to. The after-hours jump reflects some of the anticipated passive inflows. Past additions to the S&P 500 have at times surrendered early gains in the weeks after their inclusion date as forced buying fades and fundamentals regain influence. Marvell's close ties to Nvidia add another variable: if Nvidia brings more capabilities in-house or the partnership terms shift, the investment outlook can change quickly.