Marvell Technology Inc. (NASDAQ:MRVL) and Flex Ltd. (NASDAQ:FLEX) have already enjoyed strong runs this year. But another catalyst could be just days away.
• Marvell Technology stock is surging to new heights today. What’s fueling MRVL momentum?
The two companies are scheduled to join the S&P 500 before trading begins on June 22, replacing Pool Corp. (NASDAQ:POOL) and Campbell’s Co. (NASDAQ:CPB).
While the announcement on June 5 initially sparked interest in both stocks, the bigger event may still lie ahead.
That’s because S&P 500 inclusion triggers a wave of mechanical buying from index funds and exchange-traded funds which track the benchmark. Those funds are required to own newly added constituents, creating demand that is largely unrelated to a company’s fundamentals.
Because many of the largest ETFs, including the SPDR S&P 500 ETF Trust (NYSE:SPY), iShares Core S&P 500 ETF (NYSE:IVV) and Vanguard S&P 500 ETF (NYSE:VOO), track the benchmark, the rebalance typically triggers a wave of portfolio adjustments from passive investors.
For investors, that raises an interesting question: could Marvell and Flex receive another boost as passive managers complete their purchases ahead of the rebalance?
The AI Stock Passive Funds Are About To Buy
Marvell enters the index as one of the market’s biggest artificial intelligence winners.
Shares have surged this year as investors increasingly view the company as a key beneficiary of growing demand for custom AI chips. The semiconductor company has emerged as one of the leading alternatives to Broadcom Inc. (NASDAQ:AVGO) in the rapidly expanding custom ASIC market, where cloud giants are designing their own AI accelerators.
The company recently projected its custom AI chip business could exceed $10 billion in annual revenue by fiscal 2029, helping fuel investor enthusiasm around the stock.
The S&P 500 addition arrives as Marvell’s AI narrative continues to gain traction on Wall Street, potentially creating a rare combination of fundamental and mechanical demand.
The Quiet AI Infrastructure Play
Flex may be less familiar to investors, but the company has quietly become another beneficiary of the AI infrastructure boom.
The manufacturing and supply-chain specialist plays a key role in data center, networking and server hardware production, giving it exposure to the same wave of spending that has lifted many AI-related stocks.
Its market value has climbed sharply in recent years as demand for AI infrastructure expanded, eventually growing large enough to earn promotion into the benchmark index.
Unlike many of the market’s high-profile AI names, however, Flex has largely flown under the radar.
Why Investors Are Watching June 22
S&P 500 additions often generate heightened trading activity as passive funds, benchmarked portfolios and index-tracking ETFs adjust their holdings.
The exact impact varies from stock to stock, but inclusion typically expands a company’s investor base and increases visibility among institutional investors.
For Marvell and Flex, the timing is particularly notable.
One is emerging as a major player in custom AI silicon. The other is benefiting from the buildout of AI infrastructure. Soon, both will gain access to one of Wall Street’s largest sources of automatic demand.
That combination could make Marvell and Flex two of this week’s quiet winners.
Foto: Pavel Ignatov / Shutterstock
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