Quick overview

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Marvell, a chipmaker that produces a variety of components and products required for the surge in artificial intelligence infrastructure, will become the most recent semiconductor company to be included in the S&P 500 on June 22. According to a press release, Flex, an electronics contract manufacturer, will also be included in the index on June 22.

Marvell’s stock increased 5% during prolonged trading. When discussing the two chipmakers’ collaboration earlier this week, Nvidia CEO Jensen Huang gave the chipmaker a boost by stating that it might be the “next trillion-dollar company.” Additionally, Nvidia contributed $2 billion to the business. In extended trading, Flex increased by 4%.

Leading tech firms like Apple and Nvidia use the company’s manufacturing services. The action demonstrates how the technology industry is becoming significant to the stock market. Other technologies include Veeva Systems, AppLovin, Datadog, DoorDash, and Robinhood.

The company finally cleared the final hurdle after reporting GAAP profitability over its most recent four consecutive quarters, heavily driven by explosive demand for its specialized hardware.

Alongside Broadcom, Marvell has become an industry leader in designing custom chips and high-speed connectivity solutions (like optical networking and electro-optics) for cloud providers. As Big Tech companies build out massive AI data centers, they are increasingly relying on Marvell to help reduce their dependence on Nvidia’s costly and supply-constrained processors. Marvell’s momentum reached a fever pitch just days before the index announcement. At the Computex conference, Nvidia CEO Jensen Huang publicly called Marvell a potential “next trillion-dollar company,” praising its critical role in data center connectivity. The comment sent the stock soaring, pushing Marvell’s market capitalization past $275 billion.