Nvidia to replace Intel in Dow Jones Industrial Average — Intel's 25-year reign has come to an end

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Nvidia's AI leadership and Intel's bungling of its finances leads to this shakeup in the financial world.

Nvidia AI
(Image credit: Shutterstock)

Nvidia will replace Intel on the Dow Jones Industrial Average, indicating the massive impact of the AI boom on the semiconductor and tech industries and the entire market. According to CNBC, this change will happen on November 8, about three months after news of Intel's financial woes broke out.

The move was sparked by Intel's massive stock price drop—over 30% overnight—following the disastrous financial results released last August. The company has been bleeding cash through its data center and foundry divisions, resulting in a $1.6 billion loss for the second quarter of 2024. This was soon followed by news of massive layoffs, with over 15,000 employees affected.

On the other hand, Nvidia’s stock price has been growing by leaps and bounds owing to the AI boom. For a short time, it has become the most valuable company in the world, with a market capitalization of $3.34 trillion. Even though the company has dropped down to second place next to Apple, it’s still a remarkable rise in such a short amount of time.

Nvidia's share price was $14.16 in November 2022, rising by 218% to $45.01 a year later. Today, the company’s stock price is $135.37, another 201% jump over the past 12 months. This means that the company’s value jumped by over 850% in just two years.

Intel entered the Dow Jones Industrial Average in 1999, but its 25-year run was cut short by its failure to take the lead in artificial intelligence. On the other hand, Nvidia's replacement would be the fourth tech company worth over a trillion dollars to make it into the Dow, after Microsoft, Apple, and Amazon. Interestingly, Amazon entered the list just this year after replacing the retail company Walgreens in February.

A five-person committee, including editors from the Wall Street Journal, selects the companies to be included in the list. Although there are no specific rules for a company to be considered for the Dow, the committee members consider the following factors when determining which organizations will be added: large market capitalization, industry leadership, sustained financial growth, and investor interest. Nvidia’s entry into the list ticks all these boxes, showing the financial market’s positive outlook on the future of artificial intelligence.

Jowi Morales
Jowi Morales
Contributing Writer

Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.

19 Comments Comment from the forums
  • hotaru251
    nvidias value will plummet though once ai bubble bursts when the world finally accepts its not profitable.
    its unlikely the next boom will be anything like ai/crypto booms.
    Reply
  • Marlin1975
    hotaru251 said:
    nvidias value will plummet though once ai bubble bursts when the world finally accepts its not profitable.
    its unlikely the next boom will be anything like ai/crypto booms.

    Problem is that may take a few more years till that happens.

    I want to short Nvidia so bad as I also know its a bubble as well. But never under estimate human stupidity. That can last a lot longer that I am solvent on shorts.
    Reply
  • bit_user
    hotaru251 said:
    nvidias value will plummet though once ai bubble bursts when the world finally accepts its not profitable.
    Nvidia isn't just doing datacenter AI solutions, though. They're also building SoCs + software for self-driving and robotics, and are even set to enter the client computing market, in some fashion.

    Furthermore, they have datacenter networking product lines, thanks to their acquisition of Mellanox. They're also getting into the datacenter CPU business, with Grace. If they actually design their own ARM cores for the client market, then I'd expect those to show up in their datacenter CPUs, as well. They did try to buy ARM, which you could interpret as a sign that they want to play in those markets.

    We don't know what other acquisitions they might make or new markets they could enter. It could be other businesses with a stable revenue stream, like when AMD bought Xilinx.

    I've never been a big cheerleader for Nvidia, and I don't own any individual share in them, but I would caution against being too dire about their long-term prospects. They've proven to be both flexible and resilient, as well as ruthlessly competitive. That's not to say I think they're not overvalued... I'm not really going to be drawn on that point.
    Reply
  • Co BIY
    The Dow Jones inclusion is a popularity contest.

    Nvidia over Intel is obvious.
    Reply
  • hotaru251
    bit_user said:
    Nvidia isn't just doing datacenter AI solutions, though. They're also building SoCs + software for self-driving and robotics, and are even set to enter the client computing market, in some fashion.
    oh i know they do other stuff, but the reason they skyrocketed is 100% due to the ai bubble that everyone and their brother is wantign a piece of.
    When that pops the value will drop even thoguh they have other stuff.

    Not sayign going to go down all way to prebubble but it will be nowhere near what its current value is.
    Reply
  • Alvar "Miles" Udell
    The DJI is just a selection of 30 companies that are picked in order to give the DJI a growing number. Intel's the only chipmaker company on it, and I'd argue that even if Intel's foundries were cranking out as many chips as TSMC and their CPUs outselling AMD's 100 to 1, nVidia deserves to be on it more than Intel simply because GPU sales are a better economic indicator in 2024 than CPUs, and nVidia's GPUs in both the consumer and enterprise sectors are vastly more popular.
    Reply
  • derekullo
    Nvidia is just selling the shovels.
    As long as Elon, OpenAI, Microsoft, IBM, Google, Meta and the others are buying hundreds of thousands of GPUs for thousands of dollars each, Nvidia has nothing to worry about.

    The only reason people think AI is garbage is because the product they most associate with AI, ChatGPT, is relatively free to use and people associate free with lower quality.
    Not to say ChatGPT is perfect and never hallucinates, but that's the whole point of training the AI is so it becomes less of a Harold and Kumar and more of a Good Will Hunting.

    Having said that I have used ChatGPT for small LUA snippets because I suck at writing LUA!
    Reply
  • valthuer
    Everybody's looking forward to the AI bubble bursting, in the hopes that it'll somehow force Nvidia to revert to its 2017 GPU pricing.
    Reply
  • Alvar "Miles" Udell
    valthuer said:
    Everybody's looking forward to the AI bubble bursting, in the hopes that it'll somehow force Nvidia to revert to its 2017 GPU pricing.

    Personally I'm hoping the AI bubble bursting will bring sense back to the market and get things untied from the "Magnificent 7". GPU pricing won't turn back to reality until there's a competitor, not a collusioner, to nVidia (AMD being the colluder) and starts a proper price war, and until then GPUs will be the single piece of computer hardware which continues to increase, not decrease, over time.

    But when the AI bubble bursts you better pray it's a slow deflation else it's going to make the Dot Com Bubble look tame in comparison. The "Magnificent 7" have a market cap of over $15 trillion, and most of them are driving this AI bubble ( Alphabet (GOOGL; GOOG), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), NVIDIA (NVDA), and Tesla (TSLA) are the Magnificent 7). If that bubble does indeed burst, trillions of dollars could evaporate over the course of weeks, if not more quickly, compare that to the $5 trillion the dot com bubble wiped out over a span of 2 years.
    Reply
  • JamesJones44
    hotaru251 said:
    nvidias value will plummet though once ai bubble bursts when the world finally accepts its not profitable.
    its unlikely the next boom will be anything like ai/crypto booms.
    We've have had several booms in my 46 years of life. 80s computer boom, 90s .com boom, 00s cloud boom and housing boom, 10s crypto and streaming boom and now the AI boom.

    Each of those pops have been pretty spectacular (maybe not so much the cloud boom, but housing made up for it), I'm sure the next one will be too.
    Reply