Nvidia Set to Replace Intel on the Dow Jones: A Sign of the AI Boom’s Impact

Nvidia is set to replace Intel on the Dow Jones Industrial Average, highlighting the significant influence of the AI boom on the semiconductor and technology sectors, as well as the broader market. The CNBC report states the impact of the switch from November 8, as Intel has been dealing with a few bumps since its financial woes were revealed about three months ago.

More About NVIDIA Entering Trillion Club

Intel shares had cratered, plunging more than 30% in one day after the company announced weak financial results last August. That spurred the shift. It has faced challenges financially, especially in the data center and foundry but also across the company, and lost $1.6 billion in the 2Q 2024. Adding to this; the announcement of massive layoffs impacting more than 15,000 workers.

On the other hand, Nvidia’s stock has blown-up under the fingermark of the AI boom. It held the title of the world’s most valuable company once with a market cap of $3.34 trillion. That is an astonishing climb, even if it has since been supplanted by Apple in second place.

The price of Nvidia was $14.16 in November 2022, then increased 218% to $45.01 the next year. Now the stock trades for $135.37, which is a 201% rise in just one year. That means an increase in the value of 850%, unbelievably, in just two years. Intel has been in the Dow Jones Industrial Average since 1999, half of a quarter century that ended last week with the company getting chucked from the index for failing to capitalize on AI. Nvidia will be the fourth tech company with a market cap above a trillion following Microsoft, Apple, and Amazon, which entered the index earlier this year, replacing Walgreens.

A five-member committee, which includes editors from the Wall Street Journal, selects the companies for inclusion in the Dow. There are no official criteria, but committee members weigh factors such as a big market cap, a leadership position in the industry, steady gains in earnings, and overall interest from investors. Nvidia checks all these boxes, indicating a bullish view of the future of artificial intelligence.

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