"The Next Trillion-Dollar Company": Marvell Technology Expected to Be Included in the S&P 500 Index

Source: Global Market Report

As the S&P Dow Jones Indices committee finalizes new additions to the S&P 500 Index, Marvell Technology has become a sizable and unignorable candidate stock.

In the past two quarterly index rebalancing events, Marvell Technology has been a top-tier company qualified for inclusion in the S&P 500 Index but ultimately was not selected. However, in terms of market capitalization, Marvell is far ahead of the second-ranked qualified candidate. As of Wednesday’s close, Marvell Technology’s market value surpassed $260 billion, while runner-up Bloom Energy’s market capitalization was only about $82 billion.

Market expectations are mounting, and S&P Dow Jones Indices may announce part of the component list adjustments on Friday according to routine quarterly rebalancing practices.

Jefferies trading department analyst Jeffrey Fauvza said in a client report on Wednesday that Marvell Technology “is widely seen by the market as the next candidate for inclusion in the S&P 500 Index.” The stock surged nearly 5% on Thursday and has more than doubled year-to-date.

Stephens analyst Melissa Roberts pointed out that Marvell not only has an impressive current market capitalization, but it has also long exceeded the minimum threshold for new S&P 500 entrants.

Marvell became eligible for the index after meeting profitability requirements by the end of 2025, and Roberts noted that the company’s average market capitalization over the past year was about $54 billion.

“Seeing a company’s market capitalization consistently stay at a high level is, in my opinion, very important,” she added. This differentiates Marvell from companies that experience rapid short-term growth but may struggle to maintain those levels under normal conditions.

The index committee has considerable autonomy in selecting new members and does not strictly choose the most valuable eligible candidates. Companies must meet various probability, valuation, free float market cap, and other criteria to be considered. Committee members exercise discretion when deciding which companies are added. For example, in the March rebalancing, four companies were admitted, but during last June’s quarterly opportunity, the committee ultimately made no adjustments to the S&P 500 constituents.

Roberts stated that one factor the committee considers informally is industry balance. Marvell is an information technology company, a sector that holds a relatively small weight in the S&P 500 Index, while the S&P Total Market Index covers a broader range of companies.

Nevertheless, Marvell is not the only large IT enterprise worthy of attention. There is also Flex FLEX, an electronics manufacturing company whose stock has surged due to artificial intelligence technology and now holds a significant position in the S&P MidCap 400 Index. As of Wednesday’s close, the company’s market cap reached $59 billion, while runner-up Twilio has a market cap of $34 billion.

S&P Dow Jones Indices has recently been working to migrate mid-cap index components into the S&P 500 Index. As the index weights are based on market capitalization, such migrations prevent large companies from significantly impacting the performance of indices designed for small-cap companies. In addition, migration minimizes disruptions for funds tracking various indices.

There have been precedents recently, such as the committee admitting two companies from the same sector to the list, for instance, in the March rebalancing when optical component suppliers Lumentum Holdings LITE and Coherent COHR were both removed.