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Intel was one of only two tech stocks – the other being Microsoft – to join the Dow Jones Industrial Average during the dot-com bubble of the 90s. Chronic under performance, however, has consequences, and Intel is now being replaced with the poster child of the ongoing AI mania, NVIDIA, within the iconic index.
$NVDA, $INTC [Nvidia to join Dow Jones Industrial Average, replacing Intel]
— NOTRELOAD AI (@thudderwicks) November 1, 2024
To wit, we had noted about a month back that Intel was likely to get booted off the Dow Jones index as part of its upcoming rebalancing. Bear in mind that the DJIA rebalances quarterly, when stocks are added or removed systematically from the market cap-weighed index based on an extensive criteria.
Now, that prognostication has panned out, with NVIDIA replacing Intel within the benchmark index.
Of course, this development comes as Intel is showing nascent signs of stabilization. For the third quarter of 2024, Intel not only exceeded Wall Street’s consensus revenue estimate but also provided a relatively upbeat guidance.
However, the stock’s initial euphoric reaction was tempered by the qualifier given by Intel’s CEO, Pat Gelsinger, within the ensuing earnings call, wherein he conceded that the uptake of the AI accelerator Gaudi 3 was “slower than expected” and, therefore, the chipmaker would miss its $500 Million initial target for AI Accelerators.
Of course, as…
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