The Dow Jones Industrial Average made a major shakeup this week that reflects the current state of the semiconductor industry. Artificial intelligence-driven chipmaker Nvidia is set to replace struggling semiconductor Intel on the index.
The switch will take place on November 8, with Dow Jones manager S&P Dow Jones Indices saying the move was made” to ensure a more representative exposure to the semiconductors industry.”
Nvidia became one of the key players in the ongoing AI boom, controlling between 70% and 95% of the artificial intelligence chips market. Intel, on the other hand, has failed to catch up and has been struggling to remain relevant in the changing technology landscape.
Experts believe that being bounced from Dow Jones will not only further damage Intel’s reputation but also have a negative impact on the company’s stock.
“Losing the status of Dow Jones inclusion would be another reputational blow for Intel, as it grapples with a painful transformation and loss of confidence,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, told Reuters. “It would also mean that Intel is not included in exchange-traded funds (ETFs) which track the index, which could impact the share price further.”
Nvidia’s stock closed at $135.37 per share on Friday and is 181.03% up year-to-date. The company’s shares went up an additional 3% in after-hours trading.
Intel’s shares rose by 7.81% on Friday to close at $23.20 per share but still remain 51.46% down year-to-date.