news
Nvidia is replacing Intel on the Dow Jones Industrial Average, ending a 25-year run for a pioneering semiconductor company that has fallen behind as Nvidia cornered the market for chips that run artificial intelligence systems.
Among the businesses that comprise the 30-stock average, paint manufacturer Sherwin-Williams will also take the place of chemical company Dow Inc.
The changes, which go into effect on November 7, “were initiated to ensure a more representative exposure to the semiconductors industry and the materials sector respectively,” according to a statement released by S&P Dow Jones Indices on Friday.
Due to the Dow’s price-weighting, it further stated that “persistently lower priced stocks have a minimal impact.”
In terms of market capitalisation, Dow Inc., a significant manufacturer of chemicals and plastics that is unrelated to the index’s parent company of the same name, has also been the Dow’s smallest company.
Intel’s share price has dropped more than 50% so far this year to $23.20. The California chipmaker said Thursday that its third-quarter revenue was $13.3 billion, a 6% decrease from the same time 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 comparison, Nvidia’s stock has increased by over 173% this year, reaching $135.40.
In contrast to Intel, Nvidia relies largely on Taiwan Semiconductor Manufacturing Company, an Intel competitor, to design its chips rather than producing them themselves.
Texas-based energy provider Vistra will take the place of Virginia-based AES Corp. in another index, the Dow Jones Utility Average.