Marvell shares jump after chipmaker wins spot in S&P 500
June 8 (Reuters) - Marvell Technology shares climbed more than 9% on Monday after the chipmaker was set to join the benchmark S&P 500 at the end of June, in the latest boost to a stock that has surged recently.
Its shares have gained about 59% since May 27 after the company forecast its custom-chip business would surpass $10 billion in revenue in fiscal 2029 and Nvidia CEO Jensen Huang called Marvell the next "trillion-dollar company."
The stock dropped 16.7% in regular trading on Friday amid a broader selloff that wiped out $1.3 trillion in market value for the chip sector. The company had a market value of about $230 billion as of last close.
Marvell and larger rival Broadcom design tailor-made chips for cloud companies' data centers, a market that has boomed as major technology firms seek alternatives to Nvidia's expensive and hard-to-source AI processors.
S&P Dow Jones Indices said late on Friday that Marvell will replace swimming pool equipment distributor Pool Corp in the benchmark index. The changes will take effect before markets open on June 22.
Exchange-traded funds that track an index must adjust their portfolios to reflect any changes, requiring them to buy shares of newly added companies, a shift that can lift such stocks as fresh passive inflows come in around the time of inclusion.
The inclusion comes after Marvell reported a GAAP profit in the three months through December and over its most recent four quarters, overcoming a key barrier that had previously kept it out.
Marvell's addition underscores how the AI surge is reshaping major U.S. stock indexes. Chipmakers and data-center infrastructure firms are claiming bigger benchmark weighting on the back of strong investor conviction.
Chip stocks remain higher, despite Friday's slump, with the broader Philadelphia Semiconductor Index up more than 72% so far this year. Marvell has more than tripled in value to hit record highs.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Sriraj Kalluvila)