Intel's poor stock performance could lead to its removal from the Dow Jones

Sep 4, 2024

Intel's declining performance threatens its place in the Dow Jones, possibly replaced by Nvidia or Texas Instruments.

Intel's poor stock performance could lead to its removal from the Dow Jones

: Intel's market cap dropped below $100 billion, and its stock fell nearly 60% this year, leading to concerns about its removal from the Dow Jones. The company's $1.6 billion loss in Q2 and a plummeting stock price of $20 exacerbates its woes. Analysts warn that Intel's failure to capitalize on AI and declining data center CPU market share contribute to its struggles. Nvidia and Texas Instruments are potential replacements, with Nvidia's stock soaring 160% this year amid the AI boom.

Intel's market capitalization has fallen under $100 billion for the first time since 2000, and its stock has declined nearly 60% in 2024. The company reported a $1.6 billion loss for the second quarter, driving shares down to the $20 level and resulting in a mere 0.32% weighted influence in the DJIA.

Analysts in a Reuters report suggest that Intel's position in the Dow Jones Industrial Average is at risk due to these poor performances. Historically, the Dow's selection committee has removed companies when the gap between the highest and lowest-priced components exceeds 10 times, and currently, UnitedHealth Group's $580 share price is 29 times higher than Intel's.

Intel's struggles stem from missing the AI wave, losing market share in data center CPUs, and questionable investments in new manufacturing capacity. In response, Intel has laid off 15% of its workforce, suspended dividend payouts, and considered separating its business divisions. If removed from the Dow Jones, Nvidia and Texas Instruments are potential successors, with Nvidia experiencing a 160% stock surge fueled by AI demand.