Nvidia takes the lead in the Dow Jones: A triumph for AI

Nvidia, the leading company behind the current artificial intelligence boom, is on track to join one of Wall Street's most prestigious stock indices. S&P Dow Jones Indices announced late last week that Nvidia will replace the troubled rival Intel in the 128-year-old Dow Jones Industrial Average. This significant change will take effect with the start of trading on November 8. The paint manufacturer Sherwin-Williams is also supplementing the list as Dow Inc. leaves the index. Nvidia's inclusion in this prestigious index highlights the enormous impact of the AI-driven stock rally, which has increased the company's share price by a remarkable 900% over the past two years. Until now, the Dow Jones Industrial Average was the only major U.S. index that did not have Nvidia in its portfolio - this gap will now be closed. "Nvidia is a well-managed company, and joining the Dow shows how strong its progress has been in recent years," said Scott Colyer, CEO of Advisors Asset Management. With an impressive market value of $3.32 trillion, just $50 billion behind Apple, Nvidia has become emblematic of the euphoric sentiment surrounding AI. The shares rose 3.2% after trading hours, which could put Nvidia in a position to overtake Apple as the world's most valuable company as early as Monday, should the gains continue. Intel first joined the index in November 1999. The once-leading company in the computer processor sector is currently struggling for a turnaround. A cost-saving program for 2024 includes job cuts and the suspension of investor payouts. The stock has already lost 54% this year and fell another 2% after market close. Adam Sarhan, founder of 50 Park Investments, commented on the developments: "Intel has fallen massively behind. The Dow is changing and adapting. Today, you want to see what is the strongest that survives, not what was there 30 years ago." Dow Inc., which was formed in 2019 following a spinoff from the former DowDuPont, is also leaving the index. The Dow Jones Industrial Average, which originally started with twelve industrial stocks, has often been criticized for its narrow scope compared to the S&P 500 or Nasdaq 100. In particular, technology stocks, which have dominated the markets in recent years, were underrepresented.