Nvidia CEO Jensen Huang speaks at the launch of the supercomputer Gefion, a new AI supercomputer launched in partnership with EIFO and NVIDIA on October 23, 2024 at the Vilhelm Lauritzen terminal in Kastrup, Denmark.
Richard Scanpix | Mads Klaus Rasmussen | Mads Klaus Rasmussen via Reuters
NVIDIA is replacing Intel The Dow Jones Industrial Average saw a shake-up in the blue-chip index, while a major supplier of artificial intelligence GPUs replaced underperforming semiconductor companies.
Intel shares fell 1% in after-hours trading on Friday. Nvidia shares rose 1%.
The switchover will take place on November 8th. Sherwin Williams will replace Dow Corporation S&P Dow Jones Index Average said in a statement.
Nvidia shares are up more than 180% so far in 2024 as investors view the company as a major beneficiary of the artificial intelligence boom. Nvidia’s rapid rise with its data center artificial intelligence processors has made it one of the few companies with a market value of more than $3 trillion, joining Microsoft and Apple, both of which are included in the Dow Jones Industrial Average.
Intel shares, on the other hand, are down 51% year to date as the company faces manufacturing challenges, new competition for central processing units and the impression that it has missed out on the artificial intelligence trend.
The Dow Jones Index consists of 30 stocks and is weighted based on individual stock prices rather than the company’s total market capitalization. In May, Nvidia announced a 10-for-1 stock split to put itself in a better position. While the move had no impact on its market capitalization, the move slashed the price per share by 90%, making it part of the Dow Jones Index without much weight.
The shift is the first in the index since Amazon replaced Walgreens Boots Alliance in February. For years, the industrial-heavy Dow Jones has been playing catch-up and garnering investment opportunities from the largest technology companies. Stocks in the Dow Jones Indexes are selected by the S&P Dow Jones Indices Committee.
With the addition of Nvidia, four of six multi-trillion dollar technology companies have entered the index. The two that are not in the index are Alphabet and Meta.
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