In a move that reflects the major developments taking place in the US technology market, chip giant Nvidia will join the Dow Jones Industrial Average, at the expense of Intel, which was excluded from the index after maintaining its place in it for 25 years, as it was among the first two technology companies to be included in the index.
Nvidia will replace rival Intel Corp in the 128-year-old Dow Jones Industrial Average before trading begins on Nov. 8, S&P Dow Jones said in a statement Friday. Sherwin-Williams Inc. also joined, replacing Dow Inc.
Observers and experts believe that this step reflects the great boom in the field of artificial intelligence and the major transformation in the semiconductor industry, which led Nvidia to this amazing rise, displacing a prestigious company like Intel, which is famous for its processors.
Intel first joined the Dow Jones Industrial Average in 1999, the world's oldest index, which includes only 30 large, established companies and is weighted by the price of individual stocks rather than the companies' total market value.
The Dow Jones Industrial Average was the only major U.S. stock index that did not include Nvidia, until now.
Nvidia, which designs, develops and markets 3D graphics processors and related software, has seen a huge growth boom amid huge demand for chips used in various electronic devices and related artificial intelligence technologies.
Nvidia shares have surged 900 percent in the past 24 months, closing Friday at a market value of $3.23 trillion, about $50 billion less than Apple, putting it close to the top of the world's most valuable companies again if it continues its gains on Monday, according to Bloomberg.
In contrast, Intel, which has lost 54 percent of its market value this year, is struggling to keep up with the chip industry amid strong difficulties and competition in manufacturing, as it was a pioneer in the computer processor industry.
According to CNBC, Nvidia put itself in a good position to join the Dow Jones index when it announced in May a 10-for-1 stock split that would allow it to become part of the U.S. index without having too much weight.
This is the second time this year that the components of the Dow Jones Industrial Average have been modified, when Amazon replaced Walgreens Boots Alliance last February, and before that the components of the Dow have remained constant since August 2020.
With the addition of Nvidia, there are now four of the six tech companies valued at more than $1 trillion in the industrial index.
