NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) will replace Intel Corp (NASDAQ:INTC, ETR:INL) in the Dow Jones Industrial Average this week in the latest shake-up of the Wall Street index.
Intel has been one of the DJIA's 30 constituents since 1999, when it and Microsoft became the first companies traded on the Nasdaq exchange to be included as part of the 128-year-old benchmark.
The $100 billion Santa Clara semiconductor company will be shoved out of the way by another chipmaker as part of Friday's reshuffle, with $3.3 trillion-valued Nvidia taking its place as a true blue-chip.
It will be the second round of changes to the Dow Jones this year, following Amazon's addition to replace Walgreens Boots Alliance in February, which was the first change since 2020.
The Dow's choice of Nvidian to replace Intel is "somewhat ironic," said broker Wedbush, explaining that a large component of Intel's current struggles relates back to its decision to abandon its Xeon Phi coprocessors, which had been competing successfully with its rival's GPUs in machine learning.
This left Nvidia as the lone supplier of accelerators into the AI supercomputing market, "a lead that eventually led to NVDA's current dominance in the AI chip space.
"And Intel's lack of a compelling AI solution is in part a significant reason (along with the manufacturing struggles that led to the abandonment of Knights Landing) for Intel's difficulties today."