In a major shakeup of the prestigious Dow Jones Industrial Average, semiconductor giant Nvidia is set to replace long-time component Intel. This change, scheduled for November 8, reflects the dramatic shift in the tech landscape driven by the artificial intelligence boom.
Nvidia has emerged as a dominant force in the AI chip market, with its graphics processing units (GPUs) in high demand from tech giants like Microsoft, Meta, Google, and Amazon. The company's stellar performance is evident in its skyrocketing stock price, which has surged over 170% in 2024 alone. This remarkable growth has propelled Nvidia's market capitalization to $3.3 trillion, making it the second most valuable publicly traded company after Apple.
The inclusion of Nvidia in the Dow Jones Industrial Average underscores the growing importance of AI in the modern economy. With this addition, four of the six trillion-dollar tech companies will now be represented in the index.
Meanwhile, Intel's departure from the Dow marks the end of an era for the once-dominant PC chip manufacturer. The company has faced significant challenges in recent years, losing market share to competitors and struggling to gain a foothold in the burgeoning AI chip market. Intel's stock has plummeted by more than half this year, reflecting its ongoing difficulties.
The Dow Jones Industrial Average, comprising 30 blue-chip stocks, is weighted by share price rather than market capitalization. Nvidia's recent 10-for-1 stock split played a crucial role in making it eligible for inclusion in the index without overly influencing its weighting.
This change in the Dow's composition highlights the dynamic nature of the technology sector and the increasing prominence of AI in shaping the future of the industry.