NVIDIA (NVDA, Financial) is set to replace Intel (INTC) in the Dow Jones Industrial Average on November 8, marking a significant restructuring of the blue-chip index. This change underscores the Dow's inclination towards AI-driven technology, with NVIDIA being a primary supplier of AI GPUs. Intel, struggling with growth pressures, will be removed from the index.
As of now, NVIDIA's stock has surged over 180% in 2024, fueled by its status as a major beneficiary of the AI boom. The company has rapidly ascended to become one of the few globally valued at over $3 trillion, thanks to its data center AI processors. Conversely, Intel's stock has dropped by 51% this year due to manufacturing challenges, increased competition in the CPU sector, and a lag in AI adoption. In post-market trading on Friday, Intel's stock declined nearly 2%, while NVIDIA's stock rose by over 3%.
The Dow Jones index consists of 30 components and is price-weighted, not market cap-weighted, meaning lower-priced companies have limited impact on the index. Furthermore, S&P Global announced that Sherwin-Williams (SHW) will replace Dow Inc. (DOW) to enhance materials sector representation. In the Dow Jones Utility Average, Vistra Corp. (VST) will replace AES Corp. (AES) to better reflect the utility sector's focus on independent power and renewable energy producers.
S&P Global noted that the Dow Divisor would be updated before the market opens on November 8, 2024, to ensure a smooth transition in the index structure, with the update available on the S&P Dow Jones Indices FTP site.
