Nvidia replaces Intel on the Dow Jones Industrial Average, ending a 25-year run for a pioneering semiconductor company that fell behind as Nvidia cornered the market for chips with artificial intelligence systems
NEW YORK– Nvidia replaces Intel on the Dow Jones Industrial Average, ending a 25-year run for a pioneering semiconductor company that has fallen behind as Nvidia has cornered the market for chips running artificial intelligence systems.
Paint maker Sherwin-Williams will also acquire chemical company Dow Inc. replaced among the companies that make up the average of 30 stocks.
S&P Dow Jones Indices said on Friday that the changes taking effect on November 7 “were initiated to ensure more representative exposure to the semiconductor and materials sectors respectively.”
It added that because the Dow Jones is price-weighted, “persistently lower-priced stocks have minimal impact.”
Dow Inc., a major producer of chemicals and plastics and not related to the company of the same name behind the index, is also the smallest company in the Dow Jones in terms of market capitalization.
Intel’s stock price is down more than 50% so far this year to $23.20. On Thursday, the California chipmaker reported third-quarter revenue of $13.3 billion, down 6% from the same period last year.
Intel CEO Pat Gelsinger said at the time that the company is “acting with urgency” on a plan to reduce costs and simplify its portfolio. In contrast, Nvidia shares are up more than 173% this year to a price of $135.40.
Unlike Intel, Nvidia designs its own chips but does not manufacture them, relying heavily on the Taiwan Semiconductor Manufacturing Company, an Intel rival.
In another index, the Dow Jones Utility Average, Texas-based energy company Vistra will replace Virginia-based AES Corp.