Nvidia Replaces Intel in Dow Jones After 25 Years

Nvidia will replace Intel in the Dow Jones Industrial Average, marking a significant shift after Intel's 25-year presence in the index. This change highlights the decline of Intel, which was once a leading force in chip manufacturing.

Intel has faced tough competition, particularly from TSMC, and has struggled to keep pace with advances in technology, notably during the recent surge in generative artificial intelligence. The company missed crucial opportunities, including a chance to invest in OpenAI, the parent company of ChatGPT.

This year has been particularly challenging for Intel, with stock prices plummeting by 54%, making it the worst performer in the index. As of Friday, Intel's stock price was at $22.79, reflecting this downward trend, while Nvidia shares rose to $139.17.

Despite expressing optimism about its PC and server businesses, Intel’s ability to regain its former stature is uncertain, with experts indicating that its removal from the Dow could further damage its reputation. The removal also means that Intel will no longer be included in exchange-traded funds (ETFs) tracking the index, potentially leading to more pressure on its stock price.

Intel, founded in 1968, initially sold memory chips before shifting to processors, playing a vital role in the emergence of personal computing. In the 1990s, its "Intel Inside" branding helped elevate its products’ status in the tech market.

Currently, Intel’s revenues have dropped significantly from $54 billion in 2021 to an anticipated decline this year, leading analysts to speculate that the company might face its first annual net loss since 1986. Its market valuation has fallen below $100 billion for the first time in three decades.

In contrast, Nvidia has experienced explosive growth, becoming a pillar of the semiconductor industry, thanks to the critical role its chips play in powering AI technologies. The company's shares have surged more than two-fold this year and achieved a remarkable seven-fold increase over the past two years.

Nvidia, under the leadership of CEO Jensen Huang, has transformed from a brand recognized mainly by gamers to being viewed as a key indicator for the AI market. The introduction of a 10-for-one stock split in June made Nvidia's shares more accessible to individual investors, contributing to its valuation of $3.32 trillion, making it the second-most valuable company globally.

The stark difference in market positions between Intel and Nvidia illustrates a remarkable shift in the tech landscape, with Nvidia capitalizing on rapid advancements in artificial intelligence, while Intel's long-standing dominance has diminished significantly.

Nvidia, Intel, Dow