Tech Shakeup on the S&P 500

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Jon Quast, Matt Frankel, and Rachel Warren explain what Marvell Technology and Flex do as well as weigh in on whether they could be hidden gems. They also talk about: Marvell’s trillion-dollar opportunity. Whether Flex is overvalued right now.

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When you're ready to invest, check out this top 10 list of stocks to buy. 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 » A full transcript is below.

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Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of June 14, 2026. This podcast was recorded on June 8, 2026.

Jon Quast: There's another semiconductor stock headed for the S&P 500. You're listening to Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing.

I'm Jon Quast, and I'm joined today by contributors Matt Frankel and Rachel Warren. We're going to dip into our mailbag today, not once but twice. But first, we wanted to start with our lead story, and that is about once a quarter, the S&P 500 removes some companies from the index and adds other companies.

This is a index that tracks roughly 500 of the largest, most profitable U.S.-based companies.

There are some times where a company gets acquired or something like that, and then another company gets added in between the regular rebalancings, but we had this regular one, and Pool Stock and Campbell Soup Company are out. As a shareholder of Pool and a lover of Goldfish crackers, I'm disappointed with that. But we have a couple of new ones heading in and that is Marvell and also Flex.

While the indexing itself isn't really something material that we Foolish investors really base an investment thesis on, sometimes it is fun to bring a new stock to our attention as they get added to the large index here, so we thought it would be fun in this episode to talk about these. Story Continues I'm going to start here with Rachel. We want to talk about Marvell going into the index, basically, my question here for Rachel is, what is Marvell?

What does it do? What is so interesting about the timing here is Nvidia CEO Jensen Huang says he believes that this can be a $1 trillion dollar company some day. I want you to speak to that as well, Rachel.

Rachel Warren: Yeah. I do think that this could very much qualify under the moniker of a hidden gem. Marvell Technology, for anyone who's not familiar, this is a data infrastructure powerhouse.

They specialize in the high-speed optical interconnect chips and custom AI silicon. It's really essential in today's day and age for transmitting data across massive server clusters. As you noted, Jon, Jensen Huang recently declared Marvell the next trillion-dollar company.

He said this because, as AI models scale, computing has to be distributed across an entire data center. This makes Marvell's high-bandwidth connectivity a key solution to the industry's biggest physical bottleneck, which is data movement. Now, you might be thinking a one trillion dollar milestone sounds outrageous for a company that's currently valued in the $200 billion market cap range.

But I think that Huang's prediction is actually a reasonable long-term thesis. It's also backed by Nvidia's own two billion dollar equity stake in Marvell. That's something that's very important to note, as well.

But Marvell's path to one trillion dollars, there's a few key drivers here. There’s a massive dual-engine revenue expansion. Hyperscalers are using Marvell to design custom AI chips.

That's a business that's projected to cross $10 billion in revenue by the company's fiscal 2029. The optical business is growing at a 70%+ growth rate, and that's as they're li