Nvidia replaces Intel in Dow Jones Industrial Average
Nvidia's AI growth leads to Dow inclusion
On November 8, Nvidia (NVDA) will officially enter the Dow Jones Industrial Average (DJIA), replacing Intel. This change reflects a shift toward AI-focused tech in the blue-chip stock index, with Nvidia's rapid growth fueled by surging demand for its GPUs, especially from tech giants building AI infrastructures.
In contrast, Intel, once a leader in PC chips, has struggled to keep up with AI advancements and faced challenges from competitors like AMD, reports Cryptopolitan.
Intel’s declining performance this year has led to significant cost-cutting measures, including 16,500 layoffs. Nvidia, on the other hand, has experienced unprecedented stock growth, up 170% this year, with a market cap now second only to Apple. Nvidia’s inclusion in the Dow underscores its AI-driven ascent, bolstered by a strategic 10-for-1 stock split that made its share price fit well within the Dow’s structure.
Unprecedented Growth Driven by AI Demand
Nvidia’s revenue has doubled and even tripled over several recent quarters, driven by demand for its AI GPUs like the anticipated ‘Blackwell.’ With tech giants on a buying spree for Nvidia’s products, this momentum highlights Nvidia’s leadership in AI infrastructure. The company has described demand as “insane,” positioning it strongly within the tech industry’s shift towards AI.
Intel’s exit signals a broader industry realignment, as companies like Nvidia continue to capture market share by catering to AI’s rapid growth. While Intel has been forced to restructure, Nvidia’s trajectory shows how its focus on AI has cemented its role in the market, even as the stock joins other top tech names on the DJIA.
Market Impact and Investment Potential
The addition of Nvidia to the DJIA boosts the index’s tech representation, leaving Meta and Alphabet as the only trillion-dollar tech firms not yet included. Nvidia’s stock rose slightly after the announcement, while Intel’s shares dipped, reflecting the market’s confidence in Nvidia’s future growth.
With Nvidia’s upcoming earnings report on November 20, investor interest remains high, especially as the Cboe Volatility Index (VIX) shows increased market fluctuations. Nvidia’s options premiums are expected to stay elevated, offering potential buying opportunities. This shift in the Dow and Nvidia’s impressive AI-driven growth indicate a reshaped tech landscape, with Nvidia well-positioned at its forefront.
Recentrly we wrote, that after semiconductor giant NVIDIA released its quarterly revenue figures, which topped $26 billion for the first quarter, the company announced that it will not be slowing down its pace of development in the field of artificial intelligence.
