CEO of Nvidia, Jensen Huang, speaks throughout the launch of the supercomputer Gefion, where the brand new AI supercomputer has been established in collaboration with EIFO and NVIDIA at Vilhelm Lauritzen Terminal in Kastrup, Denmark October 23, 2024.
Ritzau Scanpix | Mads Claus Rasmussen | Via Reuters
Nvidia is replacing rival chipmaker Intel within the Dow Jones Industrial Average, a shakeup to the blue-chip index that reflects the boom in artificial intelligence and a significant shift within the semiconductor industry.
Intel shares were down 1% in prolonged trading on Friday. Nvidia shares rose 1%.
The switch will happen on Nov. 8. Also, Sherwin Williams will replace Dow Inc. within the index, S&P Dow Jones said in a press release.
Nvidia shares have climbed over 170% thus far in 2024 after jumping roughly 240% last 12 months, as investors have rushed to get a bit of the AI chipmaker. Nvidia’s market cap has swelled to $3.3 trillion, second only to Apple amongst publicly traded corporations.
Firms including Microsoft, Meta, Google and Amazon are purchasing Nvidia’s graphics processing units (GPUs), equivalent to the H100, in massive quantities to construct clusters of computers for his or her AI work. Nvidia’s revenue has greater than doubled in each of the past five quarters, and has not less than tripled in three of them. The corporate has sginaled that demand for its next-generation AI GPU called Blackwell is “insane.”
With the addition of Nvidia, 4 of the six trillion-dollar tech corporations at the moment are within the index. The 2 not within the Dow are Alphabet and Meta.
While Nvidia has been soaring, Intel has been slumping. Long the dominant maker of PC chips, Intel has lost market share to Advanced Micro Devices and has made little or no headway in AI. Intel shares have fallen by greater than half this 12 months as the corporate struggles with manufacturing challenges and latest competition for its central processors.
Intel said in a filing this week that the board’s audit and finance committee approved cost and capital reduction activities, including lowering head count by 16,500 employees and reducing its real estate footprint. The job cuts were originally announced in August.
The Dow comprises 30 components and is weighted by the share price of the person stocks as an alternative of total market value. Nvidia put itself in higher position to hitch the index in May, when the corporate announced a 10-for-1 stock split. While doing nothing to its market cap, the move slashed the worth of every share by 90%, allowing the corporate to develop into an element of the Dow without having too heavy a weighting.
The switch is the primary change to the index since February, when Amazon replaced Walgreens Boots Alliance. Over time, the Dow has been playing catchup in gaining exposure to the most important technology corporations. The stocks within the index are chosen by a committee from S&P Dow Jones Indices.
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