The S&P 500 Just Added This AI Semiconductor Stock For Index Investors

Bram Berkowitz, The Motley Fool Tue, June 9, 2026 at 11:43 PM GMT+7 4 min read ^GSPC NVDA MRVL More and more artificial intelligence names continue to invade the broader benchmark S&P 500 Index. The latest addition is the semiconductor company Marvell Technology (NASDAQ:MRVL). The stock surged on the news yesterday but had fallen by more than 7% as of 11:13 a.m. ET today. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Being added to the S&P 500 is a big deal because it is one of, if not the most followed, indexes and market benchmarks in the world. Additionally, index funds, exchange-traded funds (ETFs), and even active managers that track the index must buy any stock added to the index. Investors should monitor changes in the S&P 500 because many simply invest in the broader market by gaining exposure to it. Historically, the S&P 500’s performance has been very hard to beat over the long term. The S&P 500 conducts quarterly rebalancing, in which it removes companies that no longer meet its inclusion requirements. This can happen due to a shrinking market cap or if a company no longer meets the index’s liquidity and profitability requirements. Companies can also be acquired or merge with another company. When companies are removed, others are added, so the market-weighted index always has about 500 companies. To be included in the S&P 500, a company must be based in the U.S. and have a market cap of at least $22.7 billion. The company must also have most of its shares traded on the public market and have traded at least 250,000 shares in each of the last six months. A qualifying company must also have been publicly traded for at least a year and have positive total net income over the preceding four quarters. Marvell is involved in the AI trade in multiple ways. The company makes custom chips that compete with more general-purpose graphics processing units (GPUs) in certain scenarios. Custom chips can be better for inference of a large language model (LLM) for a specific task used at scale. But Marvell also plays a critical role in the AI supply chain, especially as GPU clusters scale. The company makes other infrastructure, such as Ethernet switch chips, digital signal processors, and photonics, that effectively enable all GPUs in a data center to communicate with one another and even between multiple data centers. Marvell’s stock is up nearly 193% this year. It got a big lift not long ago when Nvidia’s CEO Jensen Huang said he expects Marvell to be the next $1 trillion market cap company. Marvell currently trades at a market cap of around $235 billion. “When you take a computing problem, and you disaggregate it into a lot of parts, and you distribute it across the entire data center, what’s necessary is connectivity,” Huang said at a recent trade show. “That’s the reason why Matt’s (Marvell CEO Matt Murphy) doing so well. That’s the reason why Marvell is so essential.” Marvell stock is not cheap, trading at nearly 64.5 times forward earnings and nearly 20 times forward revenue. This means it will likely live and die with the AI trade. If AI capital expenditures keep growing and GPUs and data centers keep scaling, the stock is likely to do well. More general investors buying the S&P 500 should be cognizant that, as AI grows, it continues to consume a larger share of the S&P 500, so investors may be less diversified than they once were. Before you buy stock in Marvell Technology, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Marvell Technology wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $445,672!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,280,566!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don t miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. *Stock Advisor returns as of June 9, 2026. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Marvell Technology and Nvidia. The Motley Fool has a disclosure policy. The S&P 500 Just Added This AI Semiconductor Stock For Index Investors was originally published by The Motley Fool

The S&P 500 Just Added This AI Semiconductor Stock For Index Investors

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