Key facts
- Marvell Technology shares surged over 30% following Nvidia CEO's $1 trillion valuation prediction.
- Nvidia invested $2 billion in Marvell for AI infrastructure collaboration.
- Marvell Technology is poised for inclusion in the S&P 500 index.
- Marvell Technology and Flex Ltd. will join the S&P 500, replacing Pool Corp. and Campbell's.
- S&P 500 index changes are effective June 22.
- The Dow Jones Industrial Average closed at a record high.
- The Nasdaq Composite declined due to a selloff in chip stocks.
- Broadcom shares fell 15% after disappointing earnings.
- Seagate Technology's stock rallied on strong earnings and guidance.
- The market achieved its strongest start to a midterm-year second quarter since 1950.
- Initial jobless claims unexpectedly rose.
- Corporate layoffs increased, with a significant portion attributed to AI.
Marvell Technology experienced a significant surge in its stock price, rising over 30% after Nvidia CEO Jensen Huang projected a potential $1 trillion valuation for the company. Huang cited Marvell's crucial role in artificial intelligence infrastructure, noting Nvidia's $2 billion investment in Marvell for collaborative efforts. This substantial market capitalization increase makes Marvell Technology the largest company currently eligible for inclusion in the S&P 500 index. Consequently, Marvell Technology and Flex Ltd. are slated to join the S&P 500, replacing Pool Corp. and Campbell's, with these changes becoming effective on June 22. Marvell shares saw an additional 6% rise in after-hours trading following the announcement of its S&P 500 inclusion.
In broader market movements, the Dow Jones Industrial Average reached an all-time high, primarily driven by gains in UnitedHealth and financial stocks. The S&P 500 also saw an increase. However, the Nasdaq Composite index declined, influenced by a selloff in chip stocks. This downturn in the semiconductor sector was exacerbated by disappointing earnings from Broadcom, whose shares fell 15% after reporting weaker-than-expected revenue results. Other chip stocks also experienced a selloff. Seagate Technology's stock rallied significantly after reporting strong second-quarter earnings that exceeded analyst expectations, further raising its full-year earnings forecast due to improving market conditions and a robust sales pipeline.
The market has demonstrated its strongest start to a midterm-year second quarter since 1950, a period that typically falls within a weaker phase of the presidential cycle. This strong performance has been fueled by enthusiasm for technology and AI. Hedge funds, including Steve Cohen's Point72, have seen positive returns, with Point72 gaining 2% in May and achieving a 10.5% year-to-date return. However, many funds struggled to match the S&P 500's 11% year-to-date gain. The market experienced a pause on Wednesday, with the S&P 500 erasing earlier gains, putting its weekly winning streak in jeopardy. Initial jobless claims unexpectedly rose, and corporate layoffs increased, with a notable portion attributed to AI developments. Asian banks led sector growth in May, indicating a positive trend for the region's banking sector. IBM and Oracle were identified as significant stock movers on Wednesday, impacting overall market capitalization, though specific performance details were not immediately available. Swedencare's stock also saw an increase following an update at its capital markets day event.