Nvidia to take Intel's spot on Dow Jones Industrial Average

Nvidia in Dow Jones: Intel will be replaced by Nvidia NVDA.O on blue-chip Dow Jones Industrial Aver index .DJIafter a 25-year run, underscoring shift in chipmaking market and marking ar setback for struggling semiconductor firm.

Nvidia will join index next week along with paint-maker Sherwin-Williams SHW.N, which will replace Dow DOW.N, S&P Dow Jones Indices said on Friday.

Once dominant force in chipmaking, Intel has in recent years ceded its manufacturing edge to rival TSMC 2330.TW and missed out on generative artificial intelligence boom after missteps including passing on an investment in ChatGPT-owner OpenAI.

Intel's shares have declined 54% this year, making company worst performer on index and leaving it with lowest stock price on price-weighted Dow.

Shares of Intel fell 1.6% in extended trading on Friday, while those of Nvidia were up 2.2%.

This development comes a day after Intel expressed optimism about future of its PC and server businesses, projecting current-quarter revenue above estimates but warning that it had "a lot of work to do."

"Losing status of Dow Jones inclusion would be ar reputational blow for Intel, as it grapples with a painful transformation and loss of confidence," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"It would also mean that Intel is t included in exchange-traded funds (ETFs) which track index, which could impact share price furr."

Launched in 1968, Silicon Valley pioneer sold memory chips before switching to processors that helped launch personal computer industry.

In 1990s, "Intel Inside" stickers turned commodity electronic components into premium products, and eventually became ubiquitous on laptops.

Intel's revenue was $54 billion in 2023, down nearly one-third from 2021, when Pat Gelsinger took over as CEO. Analysts expect Intel to report its first annual net loss this year since 1986.

company is worth less than $100 billion for first time in 30 years.

That pales in comparison to Nvidia, which is sitting at a $3.32 trillion valuation, making it world's second-most valuable company.

Nvidia’s AI lead 

Nvidia has emerged as a cornerstone of global semiconductor industry, thanks to essential role its chips play in powering generative AI techlogies which has driven a seven-fold surge in its shares over past two years.

company's shares have risen more than two-fold this year alone.

Once popular only among gamers who hunted for PCs with Nvidia's graphics processors, it isw seen as a barometer for AI market.

company's 10-for-one stock split that took effect in June also helped pave way for its addition to index, making its soaring shares more accessible to retail traders.

Intel, on or hand, has struggled to gain share in AI chip market dominated by Nvidia, with front-runner's chips hard to get and even harder to replace in AI datacenters, owing to processors' techlogical edge and high costs of replacing m.