Nvidia is set to replace Intel on the Dow Jones Industrial Average, marking the end of Intel's 25-year presence on the index.
This change reflects the ongoing transformation in the semiconductor market, where Nvidia has emerged as a leading manufacturer of chips that power artificial intelligence systems.
In addition to this significant switch, Sherwin-Williams, a prominent paint maker, will take over the spot previously held by Dow Inc., a chemical company, on the 30-stock average. According to S&P Dow Jones Indices, these changes will take effect on November 7 and aim to provide a more accurate representation of the current Semiconductor and Materials sectors.
The price weighting of the Dow index favors more expensive stocks, which means that less costly stocks have a diminished impact on the index's overall price. Dow Inc., identified as the smallest company on the index by market capitalization, has seen its share price decline by over 50% this year, currently trading at $23.20. Despite generating revenues of $13.3 billion in the third quarter, this figure falls 6% short compared to the same period last year.
Intel’s Chief Executive, Pat Gelsinger, emphasized the pressing need for significant cost reductions to streamline operations within the company.
In contrast, Nvidia has experienced a remarkable surge, with shares rising over 173% this year, currently priced at $135.40. Unlike Intel, which manufactures its own semiconductors, Nvidia focuses on designing them and outsources production to Taiwan Semiconductor Manufacturing Co., a competitor of Intel.
Additionally, a change within the Dow Jones Utility Average will see Texas-based Vistra replace Virginia's AES Corp. in the index.
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