Marvell Technology stock surges after landing a spot in the S&P 500

The addition is part of a quarterly rebalance. Marvell, which trades on the Nasdaq $NDAQ under the ticker MRVL, will replace swimming pool equipment distributor Pool Corp in the index, the company said. Electronics manufacturer Flex will also join the S&P 500, taking the spot vacated by The Campbell's Company.

Index funds and ETFs that passively track the S&P 500 must hold shares of every member, which typically drives up a newly added stock's price as fund managers rush to buy in, according to Reuters. Marvell had previously been kept out of the index because it had not cleared a key profitability requirement. Clearing that barrier required Marvell to post a GAAP profit across its four most recent quarters in aggregate, as well as in its latest single quarter, Reuters reported.

Marvell stock was up 210% for the year through Friday's close, according to CNBC. Its chip designs serve a broad range of markets, including cloud computing, AI workloads, enterprise networking, 5G carrier infrastructure, automotive systems, and broader data center applications, with the company headquartered in Santa Clara, California.

The S&P 500 addition follows a stretch of high-profile attention for the chipmaker. Nvidia $NVDA CEO Jensen Huang called Marvell the "next trillion-dollar company" while appearing onstage with Marvell CEO Matthew Murphy at the Computex trade show in Taipei last week, sending Marvell stock up more than 30% the following session. Earlier this year, Nvidia announced a $2 billion investment in Marvell through a partnership that will integrate the chipmaker into Nvidia's AI ecosystem.

Marvell also reported record quarterly revenue of $2.42 billion last month, up 28% from a year earlier, and raised its full-year outlook on the strength of AI data center demand. The company's data center segment generated $1.83 billion of that total, accounting for 76% of revenue.

The Monday gains came after a rough end to the prior week, when Marvell shares shed 17% as lackluster revenue guidance from Broadcom $AVGO rattled AI-sector investors, according to Barron's.