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Nvidia stock will replace Intel in the Dow Jones Industrial Average, S&P Dow Jones Indices said Friday.
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Intel had held the position for 25 years, and the shift represents a shake-up among the tech titans.
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Business Insider’s Emma Cosgrove explains why the move matters for the broader AI ecosystem.
Nvidia will replace Intel in the Dow Jones Industrial Average, S&P Dow Jones Indices said in a statement on Friday, in a move that underscores the growing lead the chipmaker has over other tech titans in the AI race.
While the change won’t occur until just before the market opens on November 8, the stocks are already responding. Nvidia is up nearly 3% in after-hours trading, while Intel is down nearly 2%
Representatives for Intel and Nvidia declined to comment when reached by Business Insider.
Business Insider’s Emma Cosgrove, a senior reporter covering Nvidia, GPUs, and the AI ecosystem, explains why the shift is so seismic in the tech hierarchy.
Big news — what are your initial thoughts?
The analysis is in the statement from the Dow Jones Industrial Average. This index is intended to project the most relevant picture of the US economy, and semiconductors are an important part of that.
The companies included are meant to be the most relevant movers within their respective industries and this shows Nvidia is orders of magnitude more relevant than Intel in this space right now.
So, what does this mean for Intel?
We’ve reported extensively that Intel has allowed Big Tech waves to pass them by, and this is the result. The question for Intel right now is, can they regain relevance? Can they rejoin the other major chip players as part of the future of computing? The fact that we’re even asking those questions explains the news from S&P today.
And what about Nvidia?
It doesn’t change the underlying merits and prospects of Nvidia’s core business.
In lighter news, there’s a pretty fun party going on in the Nvidia Stockholders 2024 Facebook group.
What do Intel’s problems mean for its employees?
Business Insider reported this week the company has already seen layoffs and buyouts, on top of previous budget cuts, and some perks have been trimmed.
More broadly, what does this say about the AI ecosystem right now?
I would expect the entire AI ecosystem to be bolstered by this news. Despite Nvidia’s massive market capitalization — challenging Apple for the largest company globally — it still faces concerns about artificial intelligence’s long-term potential to drive meaningful earnings for companies other than Nvidia.
Read the original article on Business Insider