In a significant quarterly rebalancing announced on Friday, two companies central to the artificial intelligence infrastructure theme, Marvell Technology (MRVL.US) and electronics manufacturing services leader Flex Ltd (FLEX.US), have been selected for inclusion in the S&P 500 index.

They will replace pool equipment maker Pool Corp. and food company Campbell Soup Co., effective before the market opens on June 22.

Following the announcement, shares of Marvell Technology surged approximately 6% in after-hours trading, while Flex Ltd shares gained over 2%.

This inclusion is viewed by the market as a key milestone, reflecting how both firms have benefited from the ongoing AI industry boom.

Strong AI Demand Driving Growth

In its most recent earnings report, Marvell Technology not only provided quarterly guidance that exceeded market expectations but also raised its full-year outlook.

Management highlighted that robust demand for high-speed networking and custom computing chips from AI data centers is a continuous driver of business growth.

As a key player in the AI infrastructure supply chain, the company is capitalizing on the growing demand for computing power fueled by global tech giants' expansion of AI data centers.

Similarly, Flex Ltd recently delivered impressive results, issuing a fiscal 2027 profit forecast that surpassed Wall Street's consensus and announcing plans to spin off its cloud and power infrastructure business to unlock further shareholder value.

Amid rising demand for AI servers, power equipment, and data center construction, Flex Ltd is transitioning from a traditional electronics manufacturer into a significant participant in the AI infrastructure supply chain.

Significance of S&P 500 Inclusion

Analysts note that inclusion in the S&P 500 holds substantial importance for listed companies.

Under rules updated in April, a company must meet a market capitalization threshold of at least $22.7 billion and satisfy criteria related to profitability, liquidity, and public float.

Because numerous passive funds and ETFs track the index, newly added companies typically receive automatic purchases from index funds, while those removed often face corresponding selling pressure.

With the scale of passive investing continuing to expand, gaining a spot in the S&P 500 has become a major value catalyst for U.S. public companies.

Index Maintains Stringent Entry Rules

Just this Thursday, the index provider reaffirmed its existing entry standards, confirming it would not create a "fast track" for large technology IPOs.

Under current rules, newly public companies must still undergo a minimum 12-month observation period and meet profitability and public float requirements to be eligible for inclusion.

This decision means highly anticipated listings from companies like SpaceX, OpenAI, and Anthropic will not be able to join the S&P 500 in the near term.

Industry estimates suggest that if fast-tracking were allowed, SpaceX could attract around $14 billion in passive fund inflows, with OpenAI and Anthropic potentially seeing inflows of approximately $8 billion and $4.6 billion, respectively.

Analysts believe the adherence to current rules reflects a focus on the stability and investability of index constituents, rather than making adjustments based solely on company size.

It is worth noting that in the March quarterly rebalancing, Vertiv Holdings, Lumentum Holdings, Coherent, and EchoStar Corp. were also added to the S&P 500, replacing Match Group, Molina Healthcare, Lamb Weston, and Paycom Software.