Nvidia to Replace Intel in Dow Jones Index

An illuminated sign at the Nvidia booth at the Las Vegas Convention Center on Jan. 5, 2017. David Becker/Getty Images

Artificial intelligence (AI) chip manufacturer Nvidia is set to replace Intel in the Dow Jones index, as Intel’s shares have declined by more than 50 percent this year.

Nvidia will be included in the index beginning on Nov. 8, S&P Dow Jones Indices said in a Nov. 1 statement.

Intel is currently the worst-performing stock in the index this year, whereas Nvidia briefly became the most valuable company in the world on Oct. 25, dethroning Apple. It is currently the second largest company by market cap, with Intel in the 165th position.

S&P said the index changes “were initiated to ensure a more representative exposure to the semiconductors.”

The Dow Jones is an index of 30 companies, with businesses added or removed from the gauge from time to time. Dow Jones “is a price weighted index, and thus persistently lower priced stocks have a minimal impact on the index,” S&P Dow Jones Indices stated.

Nvidia’s stock price rose by 2.91 percent to $139.31 during after-hours trading on Nov. 1, while shares of Intel declined by 1.85 percent to $22.77.

Nvidia shares have surged by more than 181 percent so far this year, as Intel’s shares have declined by more than 51 percent.

Nvidia has become a key player in the semiconductor industry because of the use of its chips in AI technologies. The company’s shares have risen by more than 900 percent over the past two years.

In June, the corporation’s 10-to-1 stock split went into effect, making its shares more accessible to investors, and paving the way for Nvidia to be added to the Dow Jones index.

Intel has struggled to gain a significant foothold in the AI chip market, which is dominated by Nvidia, with the frontrunner’s chips highly sought after for the technological edge of their processors.

“Truly insane: Nvidia, $NVDA, just added $100 BILLION of market cap just on the announcement it will be joining the Dow Jones Industrial Average. Intel is being removed after 25 years of being in the index. Incredible,” market analysis service The Kobeissi Letter said in a Nov. 2 post on social media platform X.

Nvidia joins the Dow Jones ahead of the company’s third-quarter earnings report, scheduled to be released on Nov. 20. Since 2022, Nvidia’s quarterly revenues have jumped from $8.28 to $30 billion, achieved in the second quarter of 2024. During this period, seven out of 10 quarters have seen year-over-year revenue growth.

In contrast, Intel’s revenues have dipped from $18.35 billion to $12.83 billion during this period, with eight out of 10 quarters registering a year-over-year revenue decline.

Strong Demand for Nvidia Chips

Taiwan-based electronics manufacturer Foxconn recently announced the construction of the world’s largest manufacturing plant to produce Nvidia’s GB200 chips used to run AI servers. In October 2023, Nvidia said it was collaborating with Foxconn to develop a new class of data centers.

These data centers would power applications including the “digitalization of manufacturing and inspection workflows, [and the] development of AI-powered electric vehicle and robotics platforms.”

Nvidia’s graphic chips are also entangled in international conflicts.

The U.S. government has banned Nvidia from exporting powerful chips such as the A100 and H100 to China because such chips could aid the communist regime in attaining AI breakthroughs or in building sophisticated computers for its military.

Despite the ban, military entities, state-backed AI research institutes, and universities in China have managed to secure the powerful chips.

Meanwhile, Nvidia is facing accusations that it has monopolistic control of the sector. In July, a group of organizations, including the Tech Oversight Project and the Open Markets Institute, wrote a letter to the U.S. assistant attorney general, saying they would support the Department of Justice’s conducting an antitrust investigation of the company.

“Nvidia has made clear that it intends to ride the AI wave as long and as far as it can, and its astonishing dominance in GPU accelerator chips—it now holds an 80% overall global market share in GPU chips and a 98% share in the data center market—puts it in a position to crowd out competitors and set global pricing and the terms of trade,” the letter reads.

Reuters contributed to this report.