Nvidia Takes Intel's Spot in the Dow Jones Industrial Average

Nvidia is replacing Intel in the Dow Jones Industrial Average after Intel's 25-year presence in the index, according to a statement from S&P Dow Jones Indices. This change marks a significant moment for the semiconductor industry, highlighting Nvidia's rise as a key player while Intel faces ongoing struggles.

Once a leader in chip manufacturing, Intel has recently fallen behind competitors like TSMC and has not capitalized on the growing interest in generative artificial intelligence. This shift in the industry has led to a dramatic decline in Intel’s stock, which has dropped 54% this year, making it the worst-performing stock in the index.

Following the announcement, Intel's shares fell approximately 1% to $22.79 in after-hours trading. In contrast, Nvidia's shares increased by more than 2%, reaching $139.17, reflecting its strong market position.

Even as Intel expressed optimism about rebounding revenues in its PC and server businesses, analysts note that losing its place in the Dow represents another setback for the company. "Losing the status of Dow Jones inclusion would be another reputational blow for Intel," said Susannah Streeter from Hargreaves Lansdown. "It would also mean that Intel is not included in exchange-traded funds (ETFs) which track the index, which could impacting further its share price."

Founded in 1968, Intel was pivotal in developing the personal computer industry, starting with memory chips and later processors. In the 1990s, the company became a household name with its popular "Intel Inside" campaign. However, its revenue has dropped significantly, from $54 billion in 2023, marking a decline of nearly one-third from 2021. As it struggles, analysts predict Intel may report its first annual net loss since 1986, affecting its market valuation, which has fallen below $100 billion for the first time in three decades.

In stark contrast, Nvidia has emerged as a powerhouse in the semiconductor industry, especially with its chips playing a critical role in AI technologies. Over the last two years, Nvidia's shares have surged seven-fold, and they have more than doubled just this year.

Nvidia's Ascension in the Market

Nvidia began as a favorite among gamers, known for its graphics processors, but it has now positioned itself as a benchmark for the AI market. The company’s 10-for-one stock split in June has made its shares more accessible to retail investors, adding to its market appeal.

The growing demand for AI capabilities has made Nvidia's chips highly sought after, creating a challenging environment for Intel as it works to catch up in the AI sector. As a result, Intel has struggled to gain market share, with Nvidia's products being both technologically advanced and crucial in major AI data centers.

Overall, Nvidia's ascendance is a testament to its innovation and adaptability in the rapidly evolving tech landscape, setting a formidable pace in the race for dominance in AI technologies.

Nvidia, Intel, Dow