June 5 (Reuters) - Marvell Technology is set to join the benchmark S&P 500 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 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 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 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 will also be added to the index, replacing packaged food company Campbell's.
(Reporting by Shashwat Chauhan and Shivansh Tiwary in Bengaluru; Editing by Leroy Leo and Shilpi Majumdar)
