Chip giant Nvidia is set to join the Dow Jones Industrial Average, replacing struggling rival Intel, as announced by the iconic Wall Street index on Friday. The move, effective from November 8, highlights the growing significance of artificial intelligence (AI) in the US economy. This development also marks a historic moment for the semiconductor industry, with Nvidia, a leader in AI chips, taking the place of Intel, which has been part of the Dow index since 1999.
S&P Dow Jones Indices, the company responsible for managing the index, also revealed that paint manufacturer Sherwin-Williams will be added, replacing chemical giant Dow. Nvidia’s shares have surged by over 180 percent this year, driven by the demand for its powerful and high-cost processors that fuel generative AI, a technology widely regarded as the next phase of innovation. In contrast, Intel, an iconic Silicon Valley company, has witnessed a 50 percent decline in its shares this year as it struggles to keep pace with the AI boom.
The Dow Jones Industrial Average, established by Charles Dow in 1896, is often considered a barometer for the state of the US stock market, the largest in the world. Unlike the S&P 500, which weighs companies based on market capitalization, the 30-stock Dow is price-weighted, meaning that stocks with higher prices have a greater influence on its movements. Currently, tech companies such as Apple, Microsoft, IBM, Salesforce, and Cisco Systems are included in the index, while Google, Amazon, and Meta are not.