Intel will lose its place in the Dow Jones Industrial Average after a 25-year race against Nvidia, the S&P Dow Jones Indices announced Friday, the latest blow to the market. struggling chipmaker it was one of the first two technology companies to be included in the blue-chip index.

Once a dominant force in chip manufacturing, Intel has, in recent years, ceded its manufacturing advantage to compete with TSMC and missed out on the generative artificial intelligence boom after missteps including passing on an investment in ChatGPT owner OpenAI.

Intel shares have fallen 54% this year, making it the worst performer on the index and the lowest stock price in the price-weighted Dow.

The stock fell about 1% to $22.79 in extended trading Friday, while Nvidia rose more than 2% to $139.17.

The development comes a day after Intel expressed optimism about the future of its PC and server businesses, projecting revenue for the current quarter to beat estimates but warning that it had “a lot of room left.” work to be done.”

“Losing Dow Jones inclusion status would be another blow to Intel’s reputation as it grapples with a painful transformation and loss of confidence,” said Susannah Streeter, head of finance and markets at Hargreaves Lansdown.

“It would also mean that Intel is not included in exchange-traded funds (ETFs) that track the index, which could further impact the stock price.”

Launched in 1968, the Silicon Valley pioneer sold memory chips before turning to processors that helped launch the personal computer industry.

In the 1990s, “Intel Inside” stickers transformed basic electronic components into high-end products and eventually became ubiquitous on laptops.

Intel turnover was $54 billion in 2023, a drop of almost a third from 2021, when Pat Gelsinger took over as CEO. Analysts expect Intel to report its first annual net loss since 1986 this year.

The company is worth less than $100 billion for the first time in 30 years.

This pales in comparison to Nvidia, which has a valuation of $3.32 trillion, making it the second most valuable company in the world.

Nvidia’s AI leader

Nvidia has established itself as a cornerstone of the global semiconductor industrythanks to the essential role its chips play in powering generative AI technologies, which has helped its shares increase sevenfold over the past two years.

The company’s shares have more than doubled this year alone.

Once popular only among gamers looking for PCs with Nvidia graphics processors, the company is now the second most valuable in the world and is considered a barometer for the AI ​​market.

The company 10-for-one stock split which took effect in June also helped pave the way for its addition to the index, making its sharply rising stocks more accessible to retail traders.

Intel, on the other hand, has struggled to gain share in the AI ​​chip market dominated by Nvidia, with the leader’s chips hard to obtain and even harder to replace in AI data centers, due to the head start technology of processors and high costs. to replace them.