Semiconductor giant NVIDIA Corporation (NASDAQ:NVDA) is one of the top-performing stocks over the last five years, but the company's inclusion in the Dow Jones Industrial Average in November 2024 may have served as a negative moment in the company's history.

What Happened: Launched in 1896, the Dow Jones Industrial Average includes 30 top American stocks and is viewed as one of the top gauges for market health and growth. Over the last year, market experts have favored Nvidia's inclusion in the index.

On Nov. 8, Nvidia joined the Dow Jones Industrial Average, replacing Intel Corporation (NASDAQ:INTC).

The inclusion in the Dow Jones Index didn't change much for Nvidia, other than the stock needing to be purchased and added to mutual funds and ETFs that track the index like the SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA).

Sometimes events that act as positive news moments can be referred to as "sell the news" events, meaning the good news was already priced into shares and the stock could fall after the news cycle minimizes.

That could be exactly what happened with Nvidia stock after its inclusion in the Dow Jones Industrial Average. The stock traded at a high of $149.77 on Nov. 8 and would go on to hit over $150 later on Nov. 21. The stock also later hit its all-time high of $153.13 in January 2025.

However, since the stock was added to the Dow Jones Industrial Average, the once high-flying stock has experienced a significant drop. Nvidia stock is down 22.4%.

Compare that with a 10.1% stock drop for Intel, the company that Nvidia replaced in the index, over the same time frame.

The SPDR Dow Jones Industrial Average ETF Trust has fallen only 6.9% over the same time period, significantly outperforming the newest index member.

Read Also: Nvidia CEO Jensen Huang Doesn't Wear A Watch After A Gardner Taught Him The Secret Of Time

Why It's Important: Being added to the Dow Jones Industrial Average will likely go down as a significant milestone for Nvidia in the long run.

The company became one of the few companies to ever have a market capitalization of $1 trillion back in May 2023 only to quickly pass the $2 trillion and $3 trillion levels a year later.

Nvidia is currently the third most valuable public company in the world with a market cap of $2.828 trillion, trailing only Apple ($3.211 trillion) and Microsoft ($2.834 trillion).

The Dow Jones Industrial Average weights its holding by stock price instead of market cap, which means Nvidia is currently ranked 23rd of the 30 stocks for weighting.

While Nvidia is one of the stocks of lower importance in the Dow Jones Index, the stock is one of the most followed names in the markets and the company's quarterly earnings reports often provide a gauge for semiconductor demand, technology growth, and AI investment.

• If You Invested $1,000 In Nvidia Stock At IPO, Here's How Much You'd Have Today

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