Nvidia's upcoming addition to the Dow Jones Industrial Average in place of Intel is considered 'somewhat ironic,' as stated by Wedbush Securities. This change, effective Nov. 8, aims to provide a more representative exposure to the semiconductor industry. Nvidia shares rose by 2% in Monday afternoon trading, reflecting a significant increase of roughly 179% in value this year.
In contrast, Intel’s stock declined by 2.5%, with its year-to-date losses reaching 55%. Wedbush analyst Matt Bryson remarked, 'We see the Dow's choice of Nvidia to replace Intel as somewhat ironic.' He pointed out that one key aspect of Intel's ongoing struggles can be traced back to its Xeon Phi coprocessors, which were among the first products impacted by the company's challenges with the 7nm process.
At one time, these coprocessors were in competition with Nvidia's graphics processing units in the machine learning sector, yet their discontinuation left Intel as the only supplier of accelerators in the artificial intelligence supercomputing market. This situation has ultimately fostered Nvidia's current supremacy in the AI chip landscape. Nvidia stands among the trio of US public companies boasting a market capitalization exceeding $3 trillion, alongside Apple and Microsoft.
Jensen Huang, Nvidia's Chief Executive, mentioned during an earnings conference call in August, 'Data centers worldwide are ramping up efforts to modernize the entire computing stack with accelerated computing and generative AI.' He added that demand for the Hopper platform remains robust, with exciting anticipation surrounding Blackwell. Nvidia's fiscal third-quarter results are set to be released on Nov.
20, with analysts surveyed by Capital IQ anticipating normalized earnings of $0.74 per share on revenue of $32.94 billion. Earlier in June, the company executed a 10-for-1 forward stock split. Meanwhile, Intel reported a third-quarter adjusted loss of $0.46 per share, a stark contrast to the earnings of $0.41 per share it posted a year prior.
Intel's revenue also saw a decline, falling from $14.16 billion to $13.28 billion. CEO Pat Gelsinger emphasized that the company is 'acting with urgency to position the business for sustainable value creation moving forward.' Bryson further commented, 'Intel's lack of a compelling AI solution is part of the significant reasons for Intel's difficulties today.'.