AI chip manufacturer Nvidia Corp is set to replace Intel Corp in the Dow Jones Industrial Average. The chipmaker will join the US equity benchmark before the start of trading on November 8, 2024.
“Nvidia is a well-run company and joining the Dow demonstrates just how powerful its rally has been in recent years after it was at the right place at the right time when no one else was,” said Scott Colyer, chief executive at Advisors Asset Management as reported by Bloomberg.
Further, Paint-maker Sherwin-Williams is set to replace chemical company Dow Inc. to join the US equity benchmark that holds the 30-stock average.
The changes were made to ensure a more representative exposure to the semiconductors industry and the materials sector respectively, according to the statement from S&P Dow Jones Indices. It further said that since the Dow is price-weighted, the persistent lower-priced stocks will have a minimal impact.
Headquartered in Santa Clara, California, Nvidia has become the biggest driver of stock market gains since its inception in 1993. The chip manufacturing company ended the week with a market value of $3.32 trillion as per reports. Its shares were up 3.2 per cent in post-market trading, expected to dethrone Apple as the world’s most valuable company if the gains hold.
On the other hand, Intel struggled with its shares sinking over 54 per cent this year. On Thursday, the California chipmaker reported a 6 per cent sink in third-quarter revenue, which now stands at $13.3 billion. The company had reduced its expenditure, cut jobs and suspended investor payouts. In comparison, Nvidia’s shares have surged more than 173% this year to a price of $135.40.
“Intel has lagged in a huge way. Now, the Dow is evolving. You don’t want to see stocks that were there 30 years ago. You want to see what’s the strongest that survive today,” said founder of 50 Park Investments Adam Sarhan to Bloomberg.
