Image Source: Unsplash
 

In a significant reshuffling of the Dow Jones Industrial Average (DJI), Nvidia (Nasdaq: NVDA) is set to replace Intel (Nasdaq: INTC) after a notable 25-year run on the index. This transition, announced by S&P Dow Jones Indices, also sees Sherwin-Williams (NYSE: SHW) taking the place of Dow (NYSE: DOW).

The changes underscore a major shift in the semiconductor market, spotlighting Nvidia’s burgeoning influence in the industry today after a period of massive, aggressive growth in its market cap and revenue. Intel’s removal from the Dow comes amid a challenging period for the company, now seemingly a shell of what it once was.

At the time of writing (4:47 AM EST), Intel’s stock is trading down 2.76% over the premarket trading session while Nvidia’s stock has gained 2.50%.
 

Intel Out of DJI, Nvidia to Replace the Company in the Index

Once a leader in chip manufacturing, Intel has struggled to maintain its competitive edge, losing ground to rivals like TSMC and missing the AI technology wave that has surged in recent years. With its shares plummeting by 54% this year, Intel has become the Dow’s worst performer. This downturn is compounded by a significant drop in revenue, with projections indicating the company may report its first annual net loss since 1986, a stark indicator of its ongoing struggles.

For Intel, the implications of being ousted from the Dow Jones are profound. Beyond the symbolic blow to its reputation, Intel faces tangible financial repercussions.

Intel’s exclusion from exchange-traded funds (ETFs) that track the index could exert further downward pressure on its stock price. As Intel navigates a painful transformation, it grapples with a loss of investor confidence, reflected in its deteriorating financial metrics and sharply declined market valuation.
 

Nvidia Continues to Grow After 10-for-1 Stock Split

Conversely, Nvidia’s induction into the Dow Jones marks a significant milestone in its ascension as a tech powerhouse. Known for its leadership in AI technologies, Nvidia’s stock has become a critical indicator of the AI market’s health. The company’s recent 10-for-one stock split has broadened its appeal to retail investors, further bolstering its visibility and market presence.

With a market valuation soaring to $3.32 trillion, Nvidia stands as the world’s second-most valuable company, underscoring its dominance in the semiconductor sector.

More By This Author:

A Quick Postmortem Of Intel’s Quarterly Results
Boeing Stock Climbs As Union Deal Appears Within Reach
ExxonMobil Achieves $1.92 EPS In Third Quarter 2024, Slight Miss On Revenue