Nvidia replaces competing chip manufacturer Intel within the Dow Jones Industrial Average, a shakeup of the blue-chip index that reflects the boom in artificial intelligence and a significant shift within the semiconductor industry.
Intel shares fell 1% in prolonged trading on Friday. Nvidia shares rose 1%.
The change will happen on November eighth. Besides that Sherwin Williams will replace Dow Inc. within the S&P Dow Jones index said in an announcement.
Nvidia shares have risen over 170% thus far in 2024 after rising about 240% last yr as investors rushed to snap up a stake within the AI chip maker. Nvidia's market capitalization has grown to $3.3 trillion, placing it in second place Apple amongst listed corporations.
Companies incl Microsoft, Meta, Google And Amazon are buying Nvidia's graphics processing units (GPUs) just like the H100 in bulk to form computer clusters for his or her AI work. Nvidia's sales have greater than doubled in each of the last five quarters and not less than tripled in three of them. The company has suggested that demand for its next-generation AI GPU called Blackwell is “insane.”
With the addition of Nvidia, 4 of the six trillion-dollar technology corporations at the moment are included within the index. The two values not included within the Dow are Alphabet and Meta.
While Nvidia was soaring, Intel was slumping. Intel has long been the leading maker of PC chips and has been losing market share Advanced micro devices and has made little or no progress in AI. Intel shares have fallen by greater than half this yr as the corporate struggles with manufacturing challenges and latest competition for its central processors.
Intel said in a single submission This week, the board's audit and finance committee approved cost and capital reduction measures, including reducing headcount by 16,500 employees and reducing its real estate footprint. The job cuts were originally announced in August.
The Dow is made up of 30 components and is weighted by each stock's share price quite than overall market value. Nvidia put itself in a greater position to affix the index in May when it announced a 10-for-1 stock split. Although the market capitalization was not affected, the value of every stock fell by 90%, allowing the corporate to be included within the Dow without an excessive amount of weighting.
The move is the primary change to the index since February Amazon replaced Walgreens Boots Alliance. Over the years, the Dow has caught up and gained exposure to the most important tech corporations. The stocks within the index are chosen by a committee of S&P Dow Jones Indices.
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