Nvidia (NVDA.US) will replace Intel (INTC.US) as a new component of the Dow

Nvidia (NVDA.US) will replace Intel (INTC.US) in the Dow Jones Industrial Average on November 8, marking a significant reshuffle of the blue-chip index.

The move reflects the further tilt of the Dow towards the technology sector driven by artificial intelligence, with Nvidia, a major supplier of AI GPUs, being added to the index, while Intel, which has faced growth pressure in recent years, is being removed.

Nvidia's stock has risen more than 180% in 2024 so far, as investors widely believe it is one of the biggest beneficiaries of the AI boom. The company has risen rapidly thanks to its data center AI processors, becoming one of the few companies with a market capitalization of over $3 trillion.

By contrast, Intel's stock has fallen 51% this year due to difficulties in manufacturing, new competition for its central processors (CPUs), and failure to capitalize on the AI trend.

Intel's shares fell nearly 2% after-hours on Friday, while Nvidia's shares rose more than 3%.

The Dow Jones Industrial Average includes 30 components, and the index is price-weighted rather than market capitalization-weighted, so companies with lower stock prices have limited impact on the index.

Moreover, S&P Global said in its announcement that the adjustment also includes replacing The Dow Chemical Company (DOW.US) with The Sherwin-Williams Company (SHW.US) to enhance the representation of the materials industry in the index.

In the Dow Jones Utilities Average, Vistra Corp. (VST.US) will be added, replacing AES Corp. (AES.US), to better reflect the position of independent power and renewable energy producers in the utility industry.

S&P Global said that to maintain the accuracy of the Dow Jones Index in reflecting the US stock market, the index divisor will be updated prior to the opening on November 8, 2024, and will be published on the S&P Dow Jones Indices FTP website to ensure a smooth transition of the index structure.