Home Finance Nvidia will replace Intel in the Dow Jones Industrial Average

Nvidia will replace Intel in the Dow Jones Industrial Average

by trpliquidation
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Bloomberg

(Bloomberg) — Nvidia Corp., the chipmaker at the heart of the artificial intelligence boom, is joining the oldest of Wall Street’s three major stock benchmarks.

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The company will take on rival Intel Corp. before the start of trading on Nov. 8. in the 128-year-old Dow Jones Industrial Average, S&P Dow Jones Indices said in a statement late Friday. Sherwin Williams Co. also joins, replacing Dow Inc.

Nvidia’s addition to the blue-chip index is a testament to the strength of the AI-driven rally that has sent the chipmaker soaring 900% over the past 24 months. The Dow Jones Industrial Average was the only major U.S. stock benchmark to date not to include Nvidia.

“Nvidia is a well-managed company and its entry into the Dow Jones shows how powerful its rally has been in recent years after being in the right place at the right time when no one else was,” said Scott Colyer, CEO from Advisors Asset. Management.

The Santa Clara, California-based company is the poster child for the AI ​​euphoria and the biggest driver of stock price gains. The chipmaker ended the week with a market value of $3.32 trillion, about $50 billion less than Apple Inc. Shares rose 3.2% in after-hours trading, putting Nvidia in a position to dethrone Apple as the world’s most valuable company. if gains hold.

Intel joined the meter in November 1999 when it joined Microsoft Corp., SBC Communications and Home Depot Inc. was added. Intel, once the market leader in computer processors, has been struggling lately with a turnaround plan. The company has cut spending in 2024, cutting jobs and suspending payouts to investors. Shares are down 54% this year and down another 2% after the bell.

“Intel has lagged tremendously,” said Adam Sarhan, founder of 50 Park Investments. “Now the Dow Jones is evolving. You don’t want to see stocks that were still there thirty years ago. You want to see what is the strongest surviving today.

Midland, Michigan-based Dow Inc. has been in the blue chip index since 2019, when it was spun off by former parent company DowDuPont.

The Dow Jones Industrial Average, which initially started as an index of 12 industrial stocks including General Electric Co., has faced criticism for being a much narrower stock measure than the S&P 500 Index or the Nasdaq 100 and for not including technology stocks that dominated the markets. in recent years.

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