S&P Dow Jones Indices said Friday that Intel will lose its place in the Dow Jones Industrial Average after a 25-year race against Nvidia, the latest blow. Struggling chip maker It was one of the first two technology companies to be included in the blue-chip index.
Intel, once a dominant force in chip manufacturing, has in recent years handed over its manufacturing edge Missed out on the generative artificial intelligence boom after missteps including moving to rival TSMC and passing on an investment in ChatGPT-owner OpenAI.
Intel shares have fallen 54% this year, making it the worst performer on the index and the lowest stock price on the value-weighted Dow.
The stock fell nearly 1% to $22.79 in extended trading Friday, while Nvidia was up more than 2% at $139.17.
The development comes a day after Intel expressed optimism about the future of its PC and server businesses, reporting current quarter revenue that exceeded estimates but warning that it had “a lot of work to do.” “
“Losing Dow Jones inclusion status would be another reputational blow for Intel, as it grapples with a painful transition and loss of confidence,” said Susanna Streeter, head of wealth and markets at Hargreaves Lansdowne.
“It would also mean that Intel is not included in an exchange-traded fund (ETF) that tracks the index, which could further impact the share price.”
Launched in 1968, the Silicon Valley pioneer sold memory chips before the switch to processors, helping launch the personal computer industry.
In the 1990s, “Intel Inside” stickers transformed commodity electronic components into premium products, and eventually became ubiquitous on laptops.
Intel’s Revenue was $54 billion in 2023, down about a third from 2021, when Pat Gelsinger took over as CEO. Analysts expect Intel to post its first annual net loss this year since 1986.
For the first time in 30 years, the company’s value has fallen below $100 billion.
This is less than that of Nvidia, which is valued at $3.32 trillion, making it the second most valuable company in the world.
Nvidia’s AI lead
Nvidia has emerged as one Cornerstone of the global semiconductor industryThat’s thanks to the essential role its chips play in powering generative AI technologies, which has driven its shares up sevenfold over the past two years.
This year alone the company’s shares have jumped more than two times.
Once popular only among gamers looking for PCs with Nvidia’s graphics processors, the company is now the second most valuable company in the world and is seen as a barometer for the AI market.
of the company 10-for-one stock split The move paved the way for its inclusion in the index, taking effect in June, making its rising shares more accessible to retail traders.
On the other hand, Intel has struggled to gain share in the AI chip market dominated by Nvidia. Due to the technological edge and high cost of processors, the front-runner’s chips are difficult to obtain and even more difficult to replace in AI datacenters. It is difficult. To change them.
