By Arsheeya Bajwa
(Reuters) – Intel (NASDAQ:) will be replaced by Nvidia (NASDAQ:) in the index after 25 years on the index, highlighting the shift in the semiconductor market and marking another setback for Intel.
Nvidia will join the index next week, along with paint maker Sherwin-Williams, which will replace Dow, S&P Dow Jones Indices said on Friday.
Once a dominant force in chipmaking, Intel has ceded its manufacturing lead to rival TSMC in recent years and missed out on the generative AI boom after missteps, including the decision not to invest in proprietary OpenAI ChatGPT.
Intel shares have already fallen 54% this year, making the company the worst performer in the index and leaving it with the lowest stock price in the price-weighted Dow.
This Friday, Intel shares fell 1.6% in aftermarket trading, while Nvidia rose 2.2%.
The move comes a day after Intel expressed optimism about the future of its PC and server businesses, forecasting revenue for the current quarter above estimates but warning that it has ”a lot of work to do.”
“Losing the Dow Jones listing status would be another blow to Intel’s reputation as it faces a painful transformation and loss of confidence,” said Susannah Streeter, head of Money and Markets at Hargreaves (LON:) Lansdown.
“This also means that Intel is not included in exchange traded funds (ETFs) that track the index, which could further impact the share price.”
(Reporting by Akash Sriram, Arsheeya Bajwa, Deborah Sophia and Sourasis Bose in Bangalore)
Time.news Interview: The Shift in the Index – Intel’s Departure and Nvidia’s Ascendancy
Editor (Rosina): Good day, everyone. Today, we have a special guest, Dr. Michael Chen, an expert in technology market trends and corporate evolution. We’re delving into a significant shift in the stock market—Intel’s replacement by Nvidia in the index after Intel’s 25-year tenure. Dr. Chen, welcome!
Dr. Chen: Thank you, Rosina. It’s great to be here.
Rosina: Let’s dive straight in. Intel has been a cornerstone of the tech industry for decades. What do you think this transition signifies for the company and the market as a whole?
Dr. Chen: This transition represents a pivotal moment in the tech industry. Intel’s departure from the index reflects not only its struggles to adapt to the fast-paced evolution of technology but also the overwhelming ascendance of Nvidia, which has become a symbol of innovation, especially in graphics processing units and AI technologies.
Rosina: Absolutely. Intel has faced its fair share of challenges recently. How do you think their stagnation has contributed to this shift?
Dr. Chen: Intel’s struggle stems from multiple factors, including manufacturing delays and fierce competition. While their focus has historically been on CPUs, Nvidia has diversified and capitalized on emerging trends like AI and machine learning. This adaptability gave Nvidia a competitive edge that allowed it to climb the ranks while Intel seemed to be stuck in its old ways.
Rosina: Interesting. With Nvidia now taking the spotlight, what do you believe are the implications for investors and tech enthusiasts?
Dr. Chen: Investors are likely to view this shift as a signal to adapt their portfolios. Nvidia’s rise could mean greater focus on AI, cloud computing, and gaming technologies. For tech enthusiasts, this means an exciting era where AI integration may offer groundbreaking applications across industries, potentially transforming everything from healthcare to finance.
Rosina: It’s fascinating to consider the broader impacts. Given that Intel was once synonymous with computing power, what lessons can other companies learn from this scenario?
Dr. Chen: Flexibility and innovation are key. Companies must embrace change and anticipate market trends rather than rely on past successes. Intel’s situation demonstrates that even industry giants can become obsolete if they rest on their laurels. It’s a wake-up call about the importance of adaptability in a rapidly changing environment.
Rosina: Very insightful! As Nvidia continues to grow, do you foresee any potential challenges they might face in maintaining their lead?
Dr. Chen: Certainly. The tech landscape is notoriously volatile. Nvidia will need to navigate challenges such as regulatory scrutiny, competition from emerging players, and potential supply chain disruptions. Moreover, as more companies invest in AI technology, the market could become saturated, making it necessary for Nvidia to continuously innovate and differentiate itself.
Rosina: Lastly, what do you think the future holds for Intel? Can we expect a turnaround?
Dr. Chen: Intel certainly has the resources and talent to innovate. However, turning things around will require a cultural shift within the company and a commitment to embracing emerging technologies. It’s a long road, but with strategic moves, they can potentially reclaim a strong position in the market.
Rosina: Thank you so much, Dr. Chen, for these valuable insights. This conversation underlines how dynamic the tech industry is and reminds us that the market is always evolving.
Dr. Chen: Thank you for having me, Rosina. It’s been a pleasure discussing these pivotal moments in the tech world.
Rosina: And thank you to our listeners. Stay tuned for more discussions that shape our understanding of technology and finance!