Nvidia is set to replace Intel in the Dow Jones Industrial Average, marking a significant shift in the semiconductor sector as artificial intelligence drives Nvidia’s dominance. This change, effective November 8, signals growing interest in AI technologies and reflects the challenges facing Intel, which has struggled to compete in this evolving landscape.
Nvidia shares gained 1% following the announcement, while Intel’s dropped 1% in after-hours trading. Alongside this change, Sherwin-Williams will replace Dow Inc. in the blue-chip index, according to S&P Dow Jones.
Nvidia’s market cap has surged to $3.3 trillion, second only to Apple among publicly traded companies. The company’s stock has risen over 170% this year, following a 240% surge last year, driven by high demand from tech giants like Microsoft, Meta, Google, and Amazon. These companies are investing heavily in Nvidia’s advanced graphics processing units (GPUs) for AI projects. Demand for Nvidia’s next-generation Blackwell AI GPU is also projected to be exceptionally high.
Intel, once a leader in the PC chip market, has struggled to gain a foothold in AI and has faced fierce competition from Advanced Micro Devices (AMD). The company’s stock has declined by more than 50% this year, amid manufacturing challenges and layoffs affecting over 16,000 employees. Intel’s recent cost-cutting measures include a reduced real estate footprint and substantial headcount reductions.
Nvidia’s entry into the Dow was aided by a 10-for-1 stock split announced in May, making it more suitable for the price-weighted index. The Dow, composed of 30 stocks, has been gradually adding more tech exposure, with recent adjustments including Amazon’s replacement of Walgreens Boots Alliance earlier this year.
With Nvidia’s addition, four of the six U.S. trillion-dollar tech companies are now in the index, highlighting the continued expansion of AI and technology in shaping the Dow’s composition. The decision, managed by the S&P Dow Jones Indices committee, underscores Nvidia’s role as a key player in the next wave of technological advancements.
