Nvidia will replace Intel on November 8th as a new component stock of the Dow Jones Industrial Average.
As reported by Zhutong Finance APP, Nvidia (NVDA.US) will replace Intel (INTC.US) on November 8th, becoming a new component stock of the Dow Jones Industrial Average, marking a significant restructuring of this blue chip index.
This adjustment reflects the Dow Jones Index further leaning towards the AI-driven technology sector, including the major supplier of AI GPUs, Nvidia, while Intel, the semiconductor giant facing growth pressure in recent years, is being removed from the index.
As of now, Nvidia's stock price has risen by over 180% in 2024, as investors generally believe it is one of the biggest beneficiaries of the AI boom. Nvidia has rapidly risen with its datacenter AI processors, becoming one of the few companies globally with a market cap exceeding $3 trillion.
In contrast, Intel's stock price has dropped by 51% this year due to difficulties in manufacturing, new competitive pressures on central processing units (CPUs), and failure to capture the AI trends.
In after-hours trading on Friday, Intel's stock price fell by almost 2%, while Nvidia's stock price rose by over 3%.
The Dow Jones index includes 30 component stocks and is weighted by stock price rather than market cap, so companies with lower stock prices have limited impact on the index.
In addition, S&P Global stated in the announcement that this adjustment also includes Sherwin-Williams Co. (SHW.US) replacing Dow Chemical Company (DOW.US) to enhance the representation of the materials industry in the index.
In the Dow Jones Utility Average Index, Vistra Corp. (VST.US) will be added, replacing AES Corp. (AES.US), to better reflect the position of independent electrical utilities and wind power producers in the utility industry.
S&P Global stated that to maintain the accurate reflection of the Dow Jones Index on the US stock market, the index divisor will be updated before the opening on November 8, 2024, and will be published through the S&P Dow Jones Indices FTP website to ensure a smooth transition of the index structure.