Nvidia takes over Intel's place in the Dow Jones Industrial Average

By Arsheeya Bajwa

(Reuters) – Intel (INTC) will be replaced by Nvidia (NVDA) on the blue-chip Dow Jones Industrial Average index after 25 years, underscoring the shift in the chipmaking market and another setback for the struggling semiconductor company.

Nvidia will join paint maker Sherwin-Williams next week in the index that will replace Dow, S&P Dow Jones Indices said Friday.

Intel, once the dominant force in chipmaking, has ceded its manufacturing lead to rival TSMC in recent years and missed out on the generative artificial intelligence boom after the company made missteps including passing on an investment in ChatGPT owner OpenAI.

Shares of Intel have fallen 54% this year, making the company the worst performer in the index and posting the lowest share price in the price-weighted Dow.

Shares of Intel fell 1.6% in extended trading on Friday, while those of Nvidia rose 2.2%.

The development comes a day after Intel expressed optimism about the future of its PC and server businesses, forecasting above-estimated revenue for the current quarter but also warning that it has “a lot of work to do.”

“Losing Dow Jones listing status would be further reputational damage for Intel as it grapples with a painful transformation and loss of confidence,” said Susannah Streeter, head of finance and markets at Hargreaves Lansdown.

“It would also mean that Intel is not included in exchange-traded funds (ETFs) that track the index, which could further influence the share price.”

Founded in 1968, the Silicon Valley pioneer sold memory chips before branching out into processors that helped propel the personal computer industry.

In the 1990s, “Intel Inside” stickers transformed standard electronic components into premium products and eventually became ubiquitous on laptops.

Intel's revenue was $54 billion in 2023, down nearly a third from 2021, when Pat Gelsinger took over as CEO. Analysts expect Intel to report its first annual net loss since 1986 this year.

The company is worth less than $100 billion for the first time in 30 years.

That pales in comparison to Nvidia, which is the second most valuable company in the world at $3.32 trillion.

NVIDIA's AI LEADER

Nvidia has become a cornerstone of the global semiconductor industry thanks to the essential role its chips play in advancing generative AI technologies, driving its shares to rise seven-fold in the past two years.

This year alone, the company's shares have more than doubled.

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