Marvell Technology and Flex will be included in the S&P 500.

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Chip manufacturer Marvell Technology and electronics manufacturer Flex are set to join the S&P 500 index, which will further increase the weighting of the information technology sector within the benchmark index.

Index operator S&P Dow Jones Indices announced the adjustment after last Friday’s market close. Following the announcement, Marvell's after-hours stock price rose 6%, and Flex increased 4%. The change will take effect at the opening of U.S. markets on Monday, June 22, at which time Campbell's and Pool Corp will be simultaneously removed from the index.

Being included in the S&P 500 means the stocks of these two companies will reach a broader investor base, covering passive funds tracking the index, as well as actively managed funds restricted in their investment scope. This milestone is significant for both liquidity and valuation of the companies’ stocks.

Marvell's market value far exceeds the admission threshold, making its inclusion in the index almost certain

Marvell’s inclusion this time is widely seen as a matter of course. The company’s market capitalization has climbed to $230 billion, well above the S&P 500's minimum requirement of $22 billion, and also significantly higher than other competitive candidates during the same period—for example, clean energy firm Bloom Energy has a market cap of about $7.5 billion.

According to Stephens analyst Melissa Roberts, Marvell’s average market cap for the past year has consistently remained above $50 billion, strongly supporting that its growth is not just short-term speculation.

Additionally, social media company Reddit (market cap about $33 billion) was also seen as a potential candidate, but ultimately was not included.

Technology sector reinforcement logic, IPO expectations ahead of schedule

Flex, as a manufacturer deeply involved in the data center market, has previously held considerable weight in the S&P MidCap 400 Index, and its move up to the large-cap index was also widely expected by the market.

The broader context is that information technology companies have a lower overall weighting in the S&P 500 compared to their share in the broader S&P Total Market Index.

Against the backdrop of rising IPO expectations for giants like SpaceX, Anthropic, and OpenAI, there was earlier market speculation that the index committee might introduce more tech companies to bridge this gap ahead of time.

However, these tech giants remain outside the S&P 500 for now. S&P Dow Jones Indices announced last Thursday that it will maintain the current inclusion policy and not revise related rules. If the rules were modified, companies like SpaceX could apply for inclusion six months after going public, and would be exempt from the profitability requirement.

The current rules require companies to be listed for at least one year and to meet profitability conditions. SpaceX reported a significant net loss last year.

Quarterly rebalancing mechanism and index committee's discretionary space

The S&P 500 undergoes routine reviews every quarter to assess whether constituent adjustments are needed. Not every review results in changes—for example, in the same period last year, the index committee decided not to make any replacements.

In addition to market cap thresholds, candidate companies must meet stringent requirements for free float and profitability.

After companies meet these objective criteria, the index committee retains a degree of subjective discretion, considering factors such as sector weighting to make final decisions. S&P Dow Jones Indices also makes adjustments outside the scheduled times, for instance when existing constituents are acquired.

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