June 5 (Reuters) - Marvell Technology is set to join the benchmark S&P 500 index, S&P Dow Jones Indices said on Friday, sending the chipmaker's shares up 6% in extended trading.
The company will join the benchmark index later this month, after it recently cleared a key profitability hurdle riding a blistering AI-fueled rally.
The stock will replace swimming pool equipment distributor PoolCorp on the benchmark index before the start of trading on June 22.
Marvell's entry comes after it reported a GAAP
profit in its December quarter and over the sum of its most recent four quarters, a criterion it had failed to meet before, making it ineligible for inclusion.
The company's shares have more than tripled so far this year, bolstered by a broader rally in chip stocks on hopes for runaway AI-related demand.
This week alone the shares gained roughly 29%, partly due to Nvidia CEO Jensen Huang calling the chipmaker the "next trillion dollar company".
Marvell and larger rival Broadcom design custom chips for cloud-computing companies' specific data center needs, a business that has grown rapidly as Big Tech companies look 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.
The inclusion 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.
Marvell's addition to the benchmark 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.
(Reporting by Shashwat Chauhan and Shivansh Tiwary in Bengaluru; Editing by Leroy Leo and Shilpi Majumdar)
