NVIDIA joins Dow Jones: ETFs to tap into

Artificial intelligence (AI) darling NVIDIA NVDA will join the 128-year-old blue-chip Dow Jones Industrial Average index on November 8 before the market opens, replacing chipmaker Intel INTC. The restructuring represents a notable milestone that signals continued growth for the chipmaker and underscores its meteoric rise in market valuation amid the AI ​​boom.

NVIDIA has been on the rise this year, overtaking Apple AAPL as the world's most valuable company. Most analysts expect NVIDIA to become far more valuable in the future due to its dominance in the multi-billion dollar AI chip market. The stock is up 170% so far this year and an incredible 910% over the last two years. The chipmaker accounts for 7% of the weight of the S&P 500 index and accounts for about a quarter of the benchmark's 21% rise this year.

The move was triggered by NVIDIA's recent 10-to-1 stock split, which reduced the stock's weighting in the index. The Dow is a price-weighted index. Therefore, stocks that achieve higher prices receive a higher weight. The addition of NVIDIA underscores the Dow's alignment with market shifts toward AI-driven innovation, a theme that continues to shape investor interest.

According to Reuters, NVIDIA is the global leader in AI chip design and software, controlling between 80 and 95% of the market. Its success is largely due to its leadership in the development of advanced graphics processing units (GPUs), which are unmatched in producing processors that power AI systems, including generative AI, the technology that powers OpenAI's ChatGPT and text, images and others can create media.

Major cloud service providers rely on NVIDIA's GPUs to train and run AI applications. The company's customers include around 20,000 start-ups as well as big names such as Microsoft, Alphabet and Amazon.

CEO Jensen Huang expects the data center business to grow “quite significantly” next year and said demand for its AI GPU called Blackwell is “insane.” In the fourth quarter, the company expects sales of billions with the new product. The chipmaker is trying to expand production by building the world's largest Blackwell manufacturing facility in Mexico with Foxconn. Analysts at Morgan Stanley expect Blackwell could bring in $10 billion in additional revenue before the end of the year (read: NVIDIA Stock Up 155% The Year: Still a Buy? Related ETFs to Consider).

NVIDIA's next-generation GPU chip is expected to fuel another round of massive growth. The AI ​​chipmaker unveiled a powerful version of its Blackwell chip – the Blackwell Ultra – scheduled to launch in 2025, followed by a new AI chip platform, Rubin, in 2026. The company will launch an Ultra version of Rubin in 2027 introduce.

With the addition of NVIDIA, the Dow Jones now includes $4 trillion worth of technology leaders – Apple, Microsoft (MSFT), Salesforce (CRM) and NVDA – reflecting the blue-chip index's growing emphasis on companies that are in are leaders in the areas of AI and cloud technologies. This is the second time the Dow Jones has been in disarray this year. In February, Amazon replaced Walgreens in the index.

With this in mind, investors looking to capitalize on the potential strength of the Dow Jones trend might want to consider this SPDR Dow Jones Industrial Average ETF SLIDE, iShares Dow Jones US ETF IYY, Invesco Dow Jones Industrial Average Dividend ETF DJD and First Trust Dow 30 Equal Weight ETF EDOW.

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