NEW YORK (AP) — Nvidia is replacing Intel on the Dow Jones Industrial Average, ending a 25-year-run for a pioneering semiconductor company that has fallen behind as Nvidia cornered the market for chips that run artificial intelligence systems.
Paint-maker Sherwin-Williams will also replace chemical company Dow Inc. among the companies that make up the 30-stock average.
S&P Dow Jones Indices said Friday that the changes that take effect Nov. 7 “were initiated to ensure a more representative exposure to the semiconductors industry and the materials sector respectively.”
It added that because the Dow is price-weighted, “persistently lower priced stocks have a minimal impact.”
Dow Inc., a major producer of chemicals and plastics and unrelated to the similarly named company behind the index, has also been the smallest company on the Dow in terms of market capitalization.
Intel’s share price has dropped more than 50% so far this year to $23.20. On Thursday, the California chipmaker reported third-quarter revenue of $13.3 billion, down 6% from the same period last year.
Intel CEO Pat Gelsinger said at the time that the company is “acting with urgency” on a plan to reduce costs and simplify its portfolio. By contrast, Nvidia's shares have risen more than 173% this year to a price of $135.40.
Unlike Intel, Nvidia designs but doesn't manufacture its own chips, relying heavily on Taiwan Semiconductor Manufacturing Company, an Intel rival.
In another index, the Dow Jones Utility Average, Texas-based energy company Vistra will replace Virginia-based AES Corp.