As we mentioned, Intel has been removed from the Dow Jones Industrial Average index after 25 years of presence, in the latest of a series of setbacks for the chip manufacturer that until recently was speculated to be acquired by Qualcomm.
Nvidia will take Intel’s place and join the list just a few weeks after reaching a market capitalization of 3 trillion dollars for the second time in 2024, currently ranking behind Apple as the second most valuable company in the world.
Intel’s shares have lost 51% in 2024 to date, making them the worst-performing in the entire Dow Jones index. Its market capitalization is slightly below 99 billion dollars.
What does leaving the index mean for Intel?
S&P Dow Jones Indices has confirmed that Nvidia, along with the paint manufacturing company Sherwin-Williams, will be added to the index. Sherwin-Williams will replace Down Inc.
Intel’s exit from the index and Nvidia’s inclusion highlight the company’s growing market dominance, driven by a significant increase in interest in artificial intelligence chips.
The price of Nvidia’s shares has gone from about 14 dollars in November 2022 to 135.37 dollars currently.
Intel, which was once one of the main players in the chip market, lost many of the early AI opportunities, which gave Nvidia room to dominate a section of the market that supplies the hyperscalers powering many of the AI servers we rely on.
In August 2024, Intel laid off 15,000 workers, 15% of its workforce, due to high costs and low margins, and its CEO, Pat Gelsinger, aimed to save 10 billion dollars by 2025. All these efforts have not been enough to keep the company competitive in the market, and it seems to be on a downward slope.
