Nvidia's recent inclusion in the Dow Jones Industrial Average, replacing Intel, has sparked discussions around the irony of this move, according to Wedbush Securities. Effective November 8, this change aims to provide a more representative exposure to the semiconductor sector. On Monday, Nvidia shares increased by 2%, citing an impressive 179% growth year-to-date.
Meanwhile, Intel's stock fell by 2.5%, leading to a staggering year-to-date loss of 55%. Matt Bryson, a Wedbush analyst, referenced the ironic nature of this shift, particularly considering Intel's struggles tied to its Xeon Phi coprocessors, which initially competed with Nvidia's renowned graphics processing units in the machine learning arena.
However, the decline of these coprocessors left Intel as the sole accelerator supplier in the artificial intelligence supercomputing domain. This situation has significantly bolstered Nvidia's position in the AI chip market. Nvidia stands among the three U.S. public companies boasting a market capitalization exceeding $3 trillion, with tech giants Apple and Microsoft making up the trio.
Jensen Huang, Nvidia's CEO, emphasized the vigorous modernization of data centers globally focusing on accelerated computing and generative AI, highlighting robust demand for the Hopper GPU computing platform utilized in training large language models. The anticipated fiscal third-quarter results due on November 20, with analysts forecasting $0.74 normalized earnings per share on revenues of $32.94 billion, should further illuminate Nvidia's market prowess.
In stark contrast, Intel reported a third-quarter adjusted loss of $0.46 per share, a significant decline from last year's earnings of $0.41, as its revenue slipped from $14.16 billion to $13.28 billion. Pat Gelsinger, the CEO of Intel, remarked on the urgency to realign the business for sustainable value creation.
Bryson also pointed out that Intel's struggle to present a convincing AI solution is a key factor contributing to its current challenges..