Nvidia Knocks Intel Off Dow Jones Industrial Average Spot
Changes in the semiconductor industry are reflected in the blue-chip Dow Jones Industrial Average Index as Nvidia replaces Intel after gaining over 170% this year, while Intel lost over half its value.
Intel Falls Behind Nvidia On Dow Jones Industrial Average Index
The Dow Jones reflects the share value of just 30 large American companies on its index. Nvidia is now one of four of the six trillion-dollar tech companies in the index. Neither Alphabet nor Meta are listed.
After climbing about 240% in 2023, investors rushed to get a piece of Nvidia. Second only to Apple in publicly traded companies, the AI chipmaker’s market swelled to $3.3 trillion, jumping another 170% this year.
The Dow Index reflects the boom in AI and a major shift in the semiconductor industry where Nvidia has been soaring as Intel slumps.
Nvidia share rose by 1% on Friday in extended trading as Intel shares dropped 1%. The last change to the index took place in February, when Amazon was added to the Dow, replacing the Walgreens Boots Alliance.
The S&P Dow Jones said in a statement that the switch from Intel to Nvidia will take place on November 8.
Nvidia Gaining Market Share Over Intel
Although Intel and Nvidia are both headquartered in Silicon Valley, they have significant operations in Oregon. Until recently, Intel was the world’s largest chipmaker but technological setbacks and market shifts triggered a massive decline in revenue.
As it seeks to cut $10 billion from next year’s budget, Intel intends to eliminate 15,000 jobs as part of the board’s audit and finance committee-approved cost and capital reduction activities, including 1,300 jobs at its Hillsboro campus.
Intel is Oregon’s largest corporate employer, beginning the year with 23,000 workers in Hillsboro and Aloha. It also intends to reduce its real estate footprint.
Intel reported a $16 billion loss on Thursday and has lost market share to Advanced Micro Devices, making little headway in AI.
The chipmaker experienced manufacturing challenges, new competition for its central processors, and a fall of half the value of its share this year, leaving the company with a market value of about $100 billion.
At the same time, Nvidia’s computer chips are playing an increasingly dominant role in enabling AI and have a market capitalization of $3.3 trillion with sales topping $56 billion in just the first half of 2023.
Nvidia’s profits for the first six months of 2024 were $31 billion. Microsoft, Meta, Google, and Amazon are purchasing Nvidia’s graphics processing units (GPUs), such as the H100, in huge quantities to build clusters of computers.
Nvidia shares climbed about 3% as Intel shares fell about 2% on Friday after the announcement that Intel had lost its spot on the Dow.