For Intel, 2024 has been a cruel year, perhaps the worst of years.
Intel (INTC) has struggled to revive a historic business that has been unable to cope with the violent and dynamic changes that have overtaken the semiconductor industry.
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Shares finished Friday at $23.20, up 7.8% on the day but down a sickening 54% for the year.
Intel's market cap is “only” $100 billion, but that's down from $282 billion in February 2020.
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For NVIDIA (NVDA) This has been the best of the years. The company, run by Jensen Huang, makes graphics processing chips that are the basis of artificial intelligence, and everyone wants a piece of the company. Shares rose 2% to $135.40 on Friday and are up 173.4% for the year.
Its market capitalization is now $3.32 trillion, second only to Apple. (AAPL) whose market capitalization is now $3.37 billion. Huang is now a billionaire.
It is no surprise that S&P Dow Jones Indices, the company that manages the Dow Jones Industrial Average, announced on Friday that Nvidia will replace Intel in the Dow before the US stock market opens on November 8.
The reason, the index manager said, was to ensure more representative exposure to the semiconductor industry.
Why Nvidia enters the Dow Jones
Nvidia enters the Dow Jones in part because its share price is very high, compared to Intel's. This is because the Dow is a price-weighted index and changes in a low-priced stock have little effect on the index.
Nvidia's inclusion in the Dow became increasingly likely after it split its stock 10 for 1 earlier this year.
However, in the grand scheme of things, being in the Dow is not as important as getting into the S&P 500. Few money managers compare their results to those of the Dow. The S&P 500 dominates that world.
Originally, Nvidia's forte was making fast chips for use in video games. Then ai developers discovered that the technology could completely remake computing. The company's value jumped from $18 billion at the end of 2015 to $3.32 trillion, a gain of about 18,350%.
Intel, a Dow Jones component since 1999, has been the index's worst performer so far in 2024.
Its struggles represent a massive fall from the 1980s and 1990s, when it dominated the semiconductor industry, designing and manufacturing the chips used to power personal computers.
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David Silverman/Getty
Under the leadership of the late Andrew Grove, Intel became a major technology force when it joined Microsoft. (MSFT) in creating the chips to power the Windows operating system that powered almost all non-Apple personal computers in the 1980s and 1990s. Together they were known as “Wintel.”
There had been speculation since the summer that Intel could be replaced in the Dow by Nvidia. There was even talk that Qualcomm (QCOM) I wanted to buy the company.
Qualcomm focuses on chips used in telecommunications, smartphones and artificial intelligence.
Sherwin-Williams joins Dow; Vistra enters the public services index
S&P Dow Jones announced two other changes to its indices.
S&P Dow Jones announced two other changes to its index. S&P Dow Jones announced two other changes to its index.
Chemical maker Dow Inc. (D.O.W.) will be replaced by paint and coatings manufacturer Sherwin-Williams (SHW) also on November 8. In terms of market capitalization, it was the smallest of the Dow stocks. Shares closed Friday at $48.97, down 0.83%.
Sherwin-Williams finished at $357.97 and will be the sixth-highest-priced Dow stock after UnitedHealth Group. (UNH) Goldman Sachs (G.S.) Microsoft, home deposit (HD) and caterpillar (CAT) .
In a third move, S&P Dow Jones also said it will add Vistra Corp. (VST) the electric services giant, to the Dow Jones Utilities Average. The Texas company replaces AES Corp. (AES) . AES, based in Arlington, Virginia, operates electric generation facilities and sells the power to others.
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