NVIDIA will replace Intel on November 8th as a new component of the Dow Jones Industrial Average, marking the index's tilt towards the artificial intelligence technology sector. NVIDIA's stock price has risen over 180% in 2024, while Intel's stock price has fallen 51% due to growth pressures. This adjustment also includes Sherwin-Williams Co. replacing Dow Inc., and Vistra Corp. replacing AES Corp., to enhance the representation of various industries in the index
According to Zhitong Finance APP, NVIDIA (NVDA.US) will replace Intel (INTC.US) on November 8, becoming a new component of the Dow Jones Industrial Average, marking a significant restructuring adjustment of this blue-chip index.
This adjustment reflects the Dow Jones Index's further tilt towards the AI-driven technology sector, incorporating NVIDIA, a major supplier of AI GPUs, while the semiconductor giant Intel, which has faced growth pressures in recent years, is being removed from the index.
As of now, NVIDIA's stock price has risen over 180% in 2024, as investors generally view it as one of the biggest beneficiaries of the AI boom. NVIDIA has rapidly risen to become one of the few companies globally with a market capitalization exceeding $3 trillion, thanks to its data center AI processors.
In contrast, Intel's stock price has fallen 51% this year due to difficulties in manufacturing, new competitive pressures on its central processing units (CPUs), and its failure to capitalize on the AI trend.
In after-hours trading on Friday, Intel's stock price fell nearly 2%, while NVIDIA's stock price rose over 3%.
The Dow Jones Index includes 30 components and is price-weighted rather than market-cap weighted, meaning that companies with lower stock prices have a limited impact on the index.
Additionally, S&P Global noted in its announcement that this adjustment also includes Sherwin-Williams Co. (SHW.US) replacing Dow Inc. (DOW.US) to enhance the representation of the materials sector in the index.
In the Dow Jones Utility Average, Vistra Corp. (VST.US) will join the index, replacing AES Corp. (AES.US), to better reflect the position of independent power and renewable energy producers in the utility sector.
S&P Global stated that to maintain an accurate reflection of the U.S. stock market, the index divisor will be updated before the market opens on November 8, 2024, and will be published through the S&P Dow Jones Indices FTP site to ensure a smooth transition of the index structure